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Information manipulation of wishful thinkers

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  • Filiz-Ozbay, Emel
  • Liu, Zhenxun

Abstract

Digital platforms may manipulate customer reviews to impede other consumers from acquiring accurate information and to increase sales. In a rational inattention setting where consumers acquire information about product quality before making purchasing decisions, we show that the platform has incentives to restrict information acquisition in the presence of consumers with wishful thinking. These biased consumers are unaware of their bias and weigh any good news about the product quality more heavily than a Bayesian consumer. We identify the conditions under which the firm optimally constrains information acquisition, and characterize when competition can alleviate this type of exploitation. Our results extend to a broader class of non-Bayesian rules beyond wishful thinking.

Suggested Citation

  • Filiz-Ozbay, Emel & Liu, Zhenxun, 2026. "Information manipulation of wishful thinkers," Games and Economic Behavior, Elsevier, vol. 158(C), pages 763-786.
    • Handle: RePEc:eee:gamebe:v:158:y:2026:i:c:p:763-786
    DOI: 10.1016/j.geb.2026.05.010
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