Experts, Quacks and Fortune-Tellers: Dynamic Cheap Talk with Career Concerns

Abstract: The paper studies a dynamic communication game in the presence of adverse selection and career concerns. An expert of privately known competence, who cares about his reputation, chooses the timing of the forecast regarding the outcome of some future event. We find that in all equilibria in a sufficiently general class earlier reports are more credible. Further, any report hurts the expert’s reputation in the short run, with later reports incurring larger penalties. Reputation of a silent expert, on the other hand, gradually improves over time.