IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-03583827.html
   My bibliography  Save this paper

Complicating to Persuade?

Author

Listed:
  • Eduardo Perez

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Delphine Prady

Abstract

This paper addresses a common criticism of certification processes: that they simultaneously generate excessive complexity, insufficient scrutiny and high rates of undue validation. We build a model of persuasion in which low and high types pool on their choice of complexity. A natural criterion based on forward induction selects the high-type optimal pooling equilibrium.When the receiver prefers rejection ex ante, the sender simplifies her report. When the receiver prefers validation ex ante, however, more complexity makes the receiver less selective, and we provide sufficient conditions that lead to complexity inflation in equilibrium.

Suggested Citation

  • Eduardo Perez & Delphine Prady, 2012. "Complicating to Persuade?," Working Papers hal-03583827, HAL.
    • Handle: RePEc:hal:wpaper:hal-03583827
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03583827
    as

    Download full text from publisher

    File URL: https://sciencespo.hal.science/hal-03583827/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Myerson, Roger B, 1983. "Mechanism Design by an Informed Principal," Econometrica, Econometric Society, vol. 51(6), pages 1767-1797, November.
    2. Fudenberg, Drew & Tirole, Jean, 1991. "Perfect Bayesian equilibrium and sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 53(2), pages 236-260, April.
    3. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    4. Bernard Caillaud & Jean Tirole, 2007. "Consensus Building: How to Persuade a Group," American Economic Review, American Economic Association, vol. 97(5), pages 1877-1900, December.
    5. 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.
    6. Skreta, Vasiliki & Veldkamp, Laura, 2009. "Ratings shopping and asset complexity: A theory of ratings inflation," Journal of Monetary Economics, Elsevier, vol. 56(5), pages 678-695, July.
    7. Navin Kartik, 2009. "Strategic Communication with Lying Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1359-1395.
    8. In-Koo Cho & David M. Kreps, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(2), pages 179-221.
    9. Heski Bar‐Isaac & Guillermo Caruana & Vicente Cuñat, 2010. "Information Gathering and Marketing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 375-401, June.
    10. Cho, In-Koo & Sobel, Joel, 1990. "Strategic stability and uniqueness in signaling games," Journal of Economic Theory, Elsevier, vol. 50(2), pages 381-413, April.
    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.
    12. Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March.
    13. Eduardo Perez, 2012. "Competing with Equivocal Information," Working Papers hal-03583828, HAL.
    14. Mathias Dewatripont & Jean Tirole, 2005. "Modes of Communication," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1217-1238, December.
    15. repec:hal:spmain:info:hdl:2441/5umu4i0hei8jkbdr8rppdqcall is not listed on IDEAS
    16. Susan Athey, 2002. "Monotone Comparative Statics under Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 187-223.
    17. Grossman, S J & Hart, O D, 1980. "Disclosure Laws and Takeover Bids," Journal of Finance, American Finance Association, vol. 35(2), pages 323-334, May.
    18. Glenn Ellison & Alexander Wolitzky, 2012. "A search cost model of obfuscation," RAND Journal of Economics, RAND Corporation, vol. 43(3), pages 417-441, September.
    19. Glenn Ellison & Sara Fisher Ellison, 2009. "Search, Obfuscation, and Price Elasticities on the Internet," Econometrica, Econometric Society, vol. 77(2), pages 427-452, March.
    20. Banks, Jeffrey S & Sobel, Joel, 1987. "Equilibrium Selection in Signaling Games," Econometrica, Econometric Society, vol. 55(3), pages 647-661, May.
    21. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    22. Charalambos D. Aliprantis & Kim C. Border, 2006. "Infinite Dimensional Analysis," Springer Books, Springer, edition 0, number 978-3-540-29587-7, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eduardo Perez-Richet, 2014. "Interim Bayesian Persuasion: First Steps," American Economic Review, American Economic Association, vol. 104(5), pages 469-474, May.
    2. Aka, Joël, 2017. "Market approval of phytosanitary active substances in Europe: An empirical duration analysis," Food Policy, Elsevier, vol. 68(C), pages 143-153.
    3. Andrew Rhodes & Chris M. Wilson, 2018. "False advertising," RAND Journal of Economics, RAND Corporation, vol. 49(2), pages 348-369, June.
    4. Rosar, Frank, 2017. "Test design under voluntary participation," Games and Economic Behavior, Elsevier, vol. 104(C), pages 632-655.
    5. Asriyan, Vladimir & Foarta, Dana & Vanasco, Victoria, 2018. "Strategic Complexity When Seeking Approval," Research Papers 3615, Stanford University, Graduate School of Business.
    6. repec:hal:spmain:info:hdl:2441/17ekir5v8r8l6qbj0nnrfv4k2h is not listed on IDEAS
    7. Kolotilin, Anton, 2015. "Experimental design to persuade," Games and Economic Behavior, Elsevier, vol. 90(C), pages 215-226.
    8. repec:spo:wpmain:info:hdl:2441/17ekir5v8r8l6qbj0nnrfv4k2h is not listed on IDEAS
    9. Mike Felgenhauer, 2019. "Endogenous Persuasion with Costly Verification," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1054-1087, July.
    10. Vladimir Asriyan & Dana Foarta & Victoria Vanasco, 2023. "The Good, the Bad, and the Complex: Product Design with Imperfect Information," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 187-226, May.
    11. Shih-Tang Su & Vijay G. Subramanian & Grant Schoenebeck, 2021. "Bayesian Persuasion in Sequential Trials," Papers 2110.09594, arXiv.org, revised Nov 2021.
    12. Hedlund, Jonas, 2015. "Persuasion with communication costs," Games and Economic Behavior, Elsevier, vol. 92(C), pages 28-40.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:hal:spmain:info:hdl:2441/5mao0mthj59eebth5kqjqgtghb is not listed on IDEAS
    2. repec:spo:wpmain:info:hdl:2441/5mao0mthj59eebth5kqjqgtghb is not listed on IDEAS
    3. Eduardo Perez & Delphine Prady, 2012. "Complicating to Persuade?," Working Papers hal-03583827, HAL.
    4. Vladimir Asriyan & Dana Foarta & Victoria Vanasco, 2023. "The Good, the Bad, and the Complex: Product Design with Imperfect Information," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 187-226, May.
    5. Asriyan, Vladimir & Foarta, Dana & Vanasco, Victoria, 2018. "Strategic Complexity When Seeking Approval," Research Papers 3615, Stanford University, Graduate School of Business.
    6. Eduardo Perez-Richet, 2014. "Interim Bayesian Persuasion: First Steps," American Economic Review, American Economic Association, vol. 104(5), pages 469-474, May.
    7. Hedlund, Jonas, 2017. "Bayesian persuasion by a privately informed sender," Journal of Economic Theory, Elsevier, vol. 167(C), pages 229-268.
    8. Eduardo Perez, 2012. "Competing with Equivocal Information," SciencePo Working papers Main hal-03583828, HAL.
    9. repec:hal:spmain:info:hdl:2441/17ekir5v8r8l6qbj0nnrfv4k2h is not listed on IDEAS
    10. repec:spo:wpmain:info:hdl:2441/17ekir5v8r8l6qbj0nnrfv4k2h is not listed on IDEAS
    11. Arianna Degan & Ming Li, 2021. "Persuasion with costly precision," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 869-908, October.
    12. repec:hal:spmain:info:hdl:2441/5umu4i0hei8jkbdr8rppdqcall is not listed on IDEAS
    13. Hedlund, Jonas, 2015. "Persuasion with communication costs," Games and Economic Behavior, Elsevier, vol. 92(C), pages 28-40.
    14. Harbaugh, Richmond & To, Theodore, 2020. "False modesty: When disclosing good news looks bad," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 43-55.
    15. repec:spo:wpmain:info:hdl:2441/5umu4i0hei8jkbdr8rppdqcall is not listed on IDEAS
    16. Maarten C. W. Janssen & Mariya Teteryatnikova, 2017. "Mystifying but not misleading: when does political ambiguity not confuse voters?," Public Choice, Springer, vol. 172(3), pages 501-524, September.
    17. Maarten C.W. Janssen & Mariya Teteryatnikova, 2016. "Horizontal Product Differentiation: Disclosure and Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 64(4), pages 589-620, December.
    18. Navin Kartik, 2009. "Strategic Communication with Lying Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1359-1395.
    19. Alessandro Ispano & Péter Vida, 2020. "Custodial Interrogations," THEMA Working Papers 2020-05, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    20. Levent Celik, 2014. "Information Unraveling Revisited: Disclosure of Horizontal Attributes," Journal of Industrial Economics, Wiley Blackwell, vol. 62(1), pages 113-136, March.
    21. Moon, Ji-Woong, 2023. "Strategic referrals and on-the-job search equilibrium," Journal of Monetary Economics, Elsevier, vol. 134(C), pages 135-151.
    22. Eduardo Perez, 2012. "Competing with Equivocal Information," Sciences Po publications info:hdl:2441/5umu4i0hei8, Sciences Po.
    23. Suvorov, Anton & van de Ven, Jeroen, 2009. "Discretionary rewards as a feedback mechanism," Games and Economic Behavior, Elsevier, vol. 67(2), pages 665-681, November.
    24. Kakhbod, Ali & Loginova, Uliana, 2023. "When does introducing verifiable communication choices improve welfare?," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 139-162.
    25. Ginger Zhe Jin & Michael Luca & Daniel Martin, 2022. "Complex Disclosure," Management Science, INFORMS, vol. 68(5), pages 3236-3261, May.
    26. Persson, Petra, 2018. "Attention manipulation and information overload," Behavioural Public Policy, Cambridge University Press, vol. 2(1), pages 78-106, May.

    More about this item

    Keywords

    Complexity inflation; Certification; Persuasion; Strategic information transmission; Signaling games;
    All these keywords.

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-03583827. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.