Covert learning and disclosure

Abstract

I study a model of information acquisition and transmission in which the sender's ability to misreport her findings is limited. The sender learns covertly, so a key observation is that in equilibrium she must be deterred from undetectably worsening the meaning of the messages she sends. This force substantially disciplines equilibrium beliefs and behavior: the receiver is maximally skeptical of what the sender claims and learns all discovered information. I exploit these equilibrium properties to characterize the sense in which the sender benefits from her claims being more verifiable, showing that this is akin to increasing her commitment power. Finally, I identify sender- and receiver-optimal falsification environments.