Strategic Information Acquisition and Transmission∗

This paper explores the implications of costly information ac-quisition in a strategic communication model. We show that equi-librium decisions based on a biased expert’s advice may be more precise than when information is directly acquired by the decision maker, even if the expert is not more efficient than the decision maker at acquiring information. This result bears important im-plications for organization design. Communication by an expert to a decision maker may often outperform delegation of the decision making authority to the expert, as well as centralization by the de-cision maker of both information acquisition and decision making authority