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Information transmission in persuasion models with imperfect verification

Author

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  • Silva, Francisco

    (Department of Economics, Deakin University)

Abstract

I study a persuasion game between a privately informed agent and a decision maker (DM) who can imperfectly verify the statements made by the agent by observing a signal that is correlated with the agent's information. I find that whether or not the DM benefits from communicating with the agent depends on whether the DM's signal and the agent's private information satisfy a weak affiliation condition. I then discuss the significance of this result to the debate over the use of self-appraisals in business. I argue that, in general, self-appraisals are only useful when the workers' abilities are multidimensional.

Suggested Citation

  • Silva, Francisco, 2024. "Information transmission in persuasion models with imperfect verification," Theoretical Economics, Econometric Society, vol. 19(3), July.
    • Handle: RePEc:the:publsh:5578
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    References listed on IDEAS

    as
    1. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    2. Francisco Silva, 2020. "The Importance of Commitment Power in Games with Imperfect Evidence," American Economic Journal: Microeconomics, American Economic Association, vol. 12(4), pages 99-113, November.
    3. Jacob Glazer & Ariel Rubinstein, 2004. "On Optimal Rules of Persuasion," Econometrica, Econometric Society, vol. 72(6), pages 1715-1736, November.
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    More about this item

    Keywords

    Communication; verification; self-appraisals; mechanism design;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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