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Prior-Free Predictions for Persuasion

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  • Eric Gao
  • Daniel Luo

Abstract

We analyze prior-free predictions in the design of persuasion games: settings where Receiver contracts their action on Sender's choices of experiment and realized signals about some state. To do so, we characterize robust mechanisms - those which induce the same allocation rules (mappings from the state to actions) regardless of prior beliefs. These mechanisms take a simple form: they (1) incentivize fully revealing experiments, (2) depend only on the induced posterior, and (3) maximally punish pooling deviations. We then highlight a tight connection between ordinal preference uncertainty and prior-dependent predictions - all such rules are implementable if and only if the sender has a state-independent least favorite action. This, in turn, implies all (and only) ordinally monotone allocation rules are robust in binary action problems. We apply our model to school choice and uncover a novel informational justification for deferred acceptance when school preferences depend on students' unknown ability. Finally, we study good allocation settings with externalities and state-dependent outside options and show all efficient allocation rules are robust, even with significant preference heterogeneity.

Suggested Citation

  • Eric Gao & Daniel Luo, 2023. "Prior-Free Predictions for Persuasion," Papers 2312.02465, arXiv.org, revised Jan 2025.
  • Handle: RePEc:arx:papers:2312.02465
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    References listed on IDEAS

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    1. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    2. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
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