Risky shifts as multi-sender signaling

This paper addresses the issue of risky shifts by a multi-sender signaling game. Senders compete in making proposals to be adopted by a group, hence they try to signal that they have the ability to correctly observe the state. This paper shows that senders tend to avoid making a moderate proposal, because a moderate proposal signals incompetence. When facing a moderate and a risky proposal, the group tends to adopt the risky one, and we have risky shifts as a result.