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Persuasion with endogenous misspecified beliefs

Author

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  • Eliaz, Kfir
  • Spiegler, Ran
  • Thysen, Heidi C.

Abstract

We study a two-action, two-state pure persuasion game in which the receiver has non-rational expectations. The sender can add ambiguity to his message by pooling it with other messages. This can be likened to selective redaction of the original message. The receiver knows the sender's message strategy but not his redaction strategy, and uses only the former to draw inferences from the redacted message. We characterize the highest probability of persuasion attainable by the sender under these conditions.

Suggested Citation

  • Eliaz, Kfir & Spiegler, Ran & Thysen, Heidi C., 2021. "Persuasion with endogenous misspecified beliefs," LSE Research Online Documents on Economics 109842, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:109842
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    File URL: http://eprints.lse.ac.uk/109842/
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    References listed on IDEAS

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    1. Jehiel, Philippe & Koessler, Frédéric, 2008. "Revisiting games of incomplete information with analogy-based expectations," Games and Economic Behavior, Elsevier, vol. 62(2), pages 533-557, March.
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    7. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    8. Sendhil Mullainathan & Joshua Schwartzstein & Andrei Shleifer, 2008. "Coarse Thinking and Persuasion," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 577-619.
    9. Inés Moreno de Barreda & Gilat Levy & Ronny Razin, 2017. "Persuasion with Correlation Neglect: Media Power via Correlation of News Content," Economics Series Working Papers 836, University of Oxford, Department of Economics.
    10. Hagenbach, Jeanne & Koessler, Frédéric, 2020. "Cheap talk with coarse understanding," Games and Economic Behavior, Elsevier, vol. 124(C), pages 105-121.
    11. 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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    Cited by:

    1. Victor Augias & Daniel M A Barreto, 2022. "Persuading a Wishful Thinker," Working Papers hal-04066849, HAL.
    2. Victor Augias & Daniel M A Barreto, 2022. "Persuading a Wishful Thinker," SciencePo Working papers Main hal-04066849, HAL.

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    More about this item

    Keywords

    misspecified beliefs; non-rational expectations; persuasion;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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