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Influencing the Misinformed Behavior

Author

Listed:
  • Francesca Barigozzi

    (GREMAQ)

  • Bertrand Villeneuve

    (University of Toulouse)

Abstract

In many instances where public policy concerning externalities is considered, ensuring an adequate perception of the public is not less important than setting ideal taxes. We show however that public authorities are typically incited to deliver biased information (exaggeration or attenuation) to economize on the coercive instruments. Technically, we solve of model of signal cum cheap-talk. Anti-smoking campaigns and policy against antibiotics over-consumption serve as illustrations of our points.

Suggested Citation

  • Francesca Barigozzi & Bertrand Villeneuve, 2000. "Influencing the Misinformed Behavior," Econometric Society World Congress 2000 Contributed Papers 0979, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0979
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