Strategic sophistication in narrative communication under model uncertainty

Determine to what extent people in complex and uncertain environments take a narrator’s strategic incentives into account when interpreting strategically provided narratives and choosing actions.

Background

The paper studies strategic communication of narratives when a sender knows the data-generating process but a receiver is uncertain how to interpret publicly observed data. The sender may exploit this uncertainty by recommending interpretations favorable to her interests, while the receiver may account for the sender’s bias and adjust the resulting action.

The authors explicitly identify the extent to which people account for a narrator’s strategic incentives as an open question before introducing their formal model and laboratory experiment. Because the paper subsequently investigates this question empirically and reports evidence, the passage functions as the motivating unresolved question rather than an unresolved conclusion of the paper.