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Pandering to Persuade

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Author Info

  • Yeon-Koo Che
  • Wouter Dessein
  • Navin Kartik

Abstract

A principal chooses one of n>=2 projects or an outside option. An agent is privately informed about the projects' benefits and shares the principal's preferences except for not internalizing her value from the outside option. We show that strategic communication is characterized by pandering: the agent biases his recommendation toward good-looking projects--those with appealing observable attributes--even when both parties would be better off with some other project. Projects become more acceptable when pitched against a stronger slate of alternatives. We study organizational responses to the pandering distortion, such as delegation and choosing to be less informed.

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File URL: http://www.columbia.edu/~nk2339/Papers/cdk-pandering.pdf
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Bibliographic Info

Paper provided by UCLA Department of Economics in its series Levine's Bibliography with number 661465000000000163.

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Date of creation: 15 Sep 2010
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Handle: RePEc:cla:levrem:661465000000000163

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Web page: http://www.dklevine.com/

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  1. Bagnoli, M. & Bergstrom, T., 1989. "Log-Concave Probability And Its Applications," Papers 89-23, Michigan - Center for Research on Economic & Social Theory.
  2. Jordi Blanes I Vidal & Marc Möller, 2007. "When Should Leaders Share Information with Their Subordinates?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 251-283, 06.
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Cited by:
  1. Wonsuk Chung & Rick Harbaugh, 2012. "Biased Recommendations," Working Papers 2012-02, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.

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