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A model of Bayesian persuasion with transfers

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  • Li, Cheng

Abstract

We analyze a persuasion game in which a sender wants to persuade a receiver to take an action. The sender first produces information about the benefits of taking the action and then offers monetary transfers to the receiver. We characterize a sender-optimal information structure and show that limiting monetary payments may incentivize the sender to produce more information.

Suggested Citation

  • Li, Cheng, 2017. "A model of Bayesian persuasion with transfers," Economics Letters, Elsevier, vol. 161(C), pages 93-95.
    • Handle: RePEc:eee:ecolet:v:161:y:2017:i:c:p:93-95
    DOI: 10.1016/j.econlet.2017.09.036
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    References listed on IDEAS

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    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    2. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    3. Bennedsen, Morten & Feldmann, Sven E., 2006. "Informational lobbying and political contributions," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 631-656, May.
    4. Cheng Li & Christopher Cotton, 2016. "Clueless Politicians," Working Paper 1341, Economics Department, Queen's University.
    5. Juan-JosÈ Ganuza & JosÈ S. Penalva, 2010. "Signal Orderings Based on Dispersion and the Supply of Private Information in Auctions," Econometrica, Econometric Society, vol. 78(3), pages 1007-1030, May.
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    Cited by:

    1. P. Jean-Jacques Herings & Dominik Karos & Toygar T. Kerman, 2024. "Belief inducibility and informativeness," Theory and Decision, Springer, vol. 96(4), pages 517-553, June.
    2. Cheng Li, 2020. "Centralized policymaking and informational lobbying," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(4), pages 527-557, April.
    3. Cheng Li & Yancheng Xiao, 2023. "Information design, externalities, and government interventions," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(4), pages 821-839, August.
    4. Larjosto, Vilja, 2019. "Research through Design as a transformative approach," Forschungsberichte der ARL: Aufsätze, in: Abassiharofteh, Milad & Baier, Jessica & Göb, Angelina & Thimm, Insa & Eberth, Andreas & Knaps, Falc (ed.), Räumliche Transformation: Prozesse, Konzepte, Forschungsdesigns, volume 10, pages 217-225, ARL – Akademie für Raumentwicklung in der Leibniz-Gemeinschaft.
    5. Kaya, Ayça, 2023. "Paying with information," Theoretical Economics, Econometric Society, vol. 18(2), May.
    6. Björn Gehrmann, 2019. "Third-party diplomacy," HiCN Working Papers 312, Households in Conflict Network.
    7. Farzaneh Farhadi & Demosthenis Teneketzis, 2022. "Dynamic Information Design: A Simple Problem on Optimal Sequential Information Disclosure," Dynamic Games and Applications, Springer, vol. 12(2), pages 443-484, June.

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    More about this item

    Keywords

    Bayesian persuasion; Monetary transfers; Signal informativeness;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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