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Costly verification and commitment in persuasion

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  • Zhou, Junya

Abstract

Misrepresentation of information is ubiquitous in communication, while verification is often costly. This paper studies the role of verification in persuasion and its interaction with commitment in a Bayesian persuasion framework in which the sender is not fully bound by the committed plan. Both theoretically and experimentally, we demonstrate that making verification easier can significantly improve information transmission when commitment is low, but its effect is limited when commitment is high. However, empirically receivers do not respond to commitment as strongly as predicted by theory, which is consistent with base-rate neglect and conservatism. On the other hand, senders generally anticipate receivers’ actions and best respond to the empirical behavior of receivers. Verification is instrumental in improving information transmission when the cost is not high, and commitment is low.

Suggested Citation

  • Zhou, Junya, 2023. "Costly verification and commitment in persuasion," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1100-1142.
    • Handle: RePEc:eee:jeborg:v:212:y:2023:i:c:p:1100-1142
    DOI: 10.1016/j.jebo.2023.06.005
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    More about this item

    Keywords

    Bayesian persuasion; Partial commitment; Costly verification; Conservatism; Base-rate neglect;
    All these keywords.

    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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