A Model of Information Sharing under Incomplete Information

We propose a two-agent game-theoretical model to study information sharing decisions at an interim stage when information is incomplete and asymmetric. The two agents are initially endowed with private information about the ways of solving a common problem and the knowledge of how to solve it is improved by combining their pieces of private information. There is an institutional arrangement that flxes a transfer of wealth from an agent who lies about her private information. In our model we show that (i) there is a positive relation between information revelation and the amount of the transfers, (ii) an agent is more willing to reveal as her opponent acts less revealing, and (iii) an agent is less willing to reveal as her opponent is more revealing.