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Persuasion with Correlation Neglect: A Full Manipulation Result

Author

Listed:
  • Gilat Levy
  • Inés Moreno de Barreda
  • Ronny Razin

Abstract

We consider an information design problem in which a sender tries to persuade a receiver that has "correlation neglect," i.e., fails to understand that signals might be correlated. We show that a sender with unlimited number of signals can fully manipulate the receiver. Specifically, the sender can induce the receiver to hold any state-dependent posterior she wishes to. If the sender only wishes to induce a state-independent posterior, she can use fully correlated signals, but generally she needs to design more involved correlation structures.

Suggested Citation

  • Gilat Levy & Inés Moreno de Barreda & Ronny Razin, 2022. "Persuasion with Correlation Neglect: A Full Manipulation Result," American Economic Review: Insights, American Economic Association, vol. 4(1), pages 123-138, March.
    • Handle: RePEc:aea:aerins:v:4:y:2022:i:1:p:123-38
    DOI: 10.1257/aeri.20210007
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    Citations

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    Cited by:

    1. Andrew T Little, 2023. "Bayesian explanations for persuasion," Journal of Theoretical Politics, , vol. 35(3), pages 147-181, July.
    2. Maxim Senkov & Toygar T. Kerman, 2024. "Changing Simplistic Worldviews," CERGE-EI Working Papers wp773, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Kfir Eliaz & Ran Spiegler, 2024. "News Media as Suppliers of Narratives (and Information)," Papers 2403.09155, arXiv.org.
    4. Ran Spiegler, 2023. "Behavioral Causal Inference," Papers 2305.18916, arXiv.org.
    5. Itai Arieli & Yakov Babichenko & Fedor Sandomirskiy, 2023. "Persuasion as Transportation," Papers 2307.07672, arXiv.org.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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