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Persuasive communication when the sender's incentives are uncertain

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  • Jindapon, Paan
  • Oyarzun, Carlos

Abstract

We study persuasion in a modified Crawford–Sobel sender–receiver game in which the receiver makes a binary decision to accept or reject a good recommended by the sender. The good's quality and the sender's type (neutral or biased) are not observable to the receiver. These alterations yield a simple model and a unique truth-telling equilibrium in which neutral senders who observe different qualities fully separate but can only communicate low quality levels accurately. Biased senders adopt a mixed strategy that can successfully persuade the receiver to accept the good most of the time. When the sender's degree of bias is continuously distributed, a truth-telling equilibrium does not exist. Nonetheless, a partition equilibrium exists for any given number of partitions on the message space.

Suggested Citation

  • Jindapon, Paan & Oyarzun, Carlos, 2013. "Persuasive communication when the sender's incentives are uncertain," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 111-125.
    • Handle: RePEc:eee:jeborg:v:95:y:2013:i:c:p:111-125
    DOI: 10.1016/j.jebo.2013.08.015
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    Cited by:

    1. Boris Knapp, 2021. "Fake Reviews and Naive Consumers," Vienna Economics Papers vie2102, University of Vienna, Department of Economics.
    2. Boris Knapp, 2021. "Fake Reviews and Naive Consumers," Vienna Economics Papers 2102, University of Vienna, Department of Economics.
    3. Li, Zhuozheng & Rantakari, Heikki & Yang, Huanxing, 2016. "Competitive cheap talk," Games and Economic Behavior, Elsevier, vol. 96(C), pages 65-89.

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    More about this item

    Keywords

    Strategic communication; Persuasion; Perfect Bayesian equilibrium;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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