Ambiguous Expert Communication

In many consulting environments, the expert often assertively recommends the client to take an action but is vague about the probability of that action’s outcomes, making the recommendation ambiguous. This paper analytically investigates this phenomenon by incorporating the client’s optimism and attitudes toward ambiguity into a strategic communication model. A primitive premise is that a more ambiguous message can lower the expert’s communication cost by freeing the expert from further explanations.In equilibrium, the expert will claim the possibility of a range of probability distributions with a lower end strictly below their precise observation. By choosing an optimal level of ambiguity, the expert trades off the client’s expected payoffs for self-benefits from cost reduction and the extra perks from the focal action. When the client cannot exert effort to disambiguate the expert’s message, the expert benefits from the client’s greater optimism and lower aversion to ambiguous information. Interestingly, when the client exerts costly effort, the expert can leverage the client’s ambiguity attitude. As the client becomes more ambiguity averse, precise information about the less preferable option becomes even less preferable—high ambiguity aversion mitigates the ambiguity of the information about the focal option, inducing the expert to send a more ambiguous message