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Bayesian persuasion with costly messages

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  • Nguyen, Anh
  • Tan, Teck Yong

Abstract

We study a model of Bayesian persuasion in which the Sender commits to a signal structure, privately observes the signal realization, and then sends a message to the Receiver at a cost that depends on both the signal realized and the message sent. Our setup weakens the Sender's commitment to truthfully reveal information in Bayesian persuasion. We provide sufficient conditions for full communication by the Sender in the Sender-preferred equilibrium, and these conditions are satisfied under many commonly studied communication games. Under these conditions, the Sender's (lack of) commitment in the persuasion problem is quantified as a communication cost to induce a belief distribution for the Receiver. We apply this approach to study test design and information provision by lobbyists.

Suggested Citation

  • Nguyen, Anh & Tan, Teck Yong, 2021. "Bayesian persuasion with costly messages," Journal of Economic Theory, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:jetheo:v:193:y:2021:i:c:s0022053121000296
    DOI: 10.1016/j.jet.2021.105212
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Prato, Carlo & Turner, Ian R, 2022. "Institutional Foundations of the Power to Persuade," SocArXiv 4w9af, Center for Open Science.
    2. Wu, Haoyang, 2022. "A type-adjustable mechanism where the designer may obtain more payoffs by optimally controlling distributions of agents' types," MPRA Paper 113150, University Library of Munich, Germany.
    3. Ivanov, Maxim & Sam, Alex, 2022. "Cheap talk with private signal structures," Games and Economic Behavior, Elsevier, vol. 132(C), pages 288-304.
    4. Monte, Daniel & Linhares, Luis Henrique, 2023. "Stealth Startups, Clauses, and Add-ons: A Model of Strategic Obfuscation," MPRA Paper 115926, University Library of Munich, Germany.
    5. Kun Zhang, 2022. "Withholding Verifiable Information," Papers 2206.09918, arXiv.org, revised Sep 2022.
    6. Tan, Teck Yong, 2023. "Optimal transparency of monitoring capability," Journal of Economic Theory, Elsevier, vol. 209(C).
    7. Tsakas, Elias & Tsakas, Nikolas, 2021. "Noisy persuasion," Games and Economic Behavior, Elsevier, vol. 130(C), pages 44-61.
    8. Daehong Min, 2021. "Bayesian persuasion under partial commitment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 743-764, October.
    9. Qianjun Lyu & Wing Suen, 2022. "Information Design in Cheap Talk," Papers 2207.04929, arXiv.org, revised May 2024.
    10. Pei, Harry, 2023. "Repeated communication with private lying costs," Journal of Economic Theory, Elsevier, vol. 210(C).

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    More about this item

    Keywords

    Bayesian persuasion; Partial commitment; Full communication; Costly messages; Information misrepresentation;
    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
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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