IDEAS home Printed from https://ideas.repec.org/a/eee/jetheo/v165y2016icp672-706.html
   My bibliography  Save this article

Bayesian persuasion with heterogeneous priors

Author

Listed:
  • Alonso, Ricardo
  • Câmara, Odilon

Abstract

In a world in which rational individuals may hold different prior beliefs, a sender can influence the behavior of a receiver by controlling the informativeness of an experiment (public signal). We characterize the set of distributions of posterior beliefs that can be induced by an experiment, and provide necessary and sufficient conditions for a sender to benefit from persuasion. We then provide sufficient conditions for the sender to benefit from persuasion for almost every pair of prior beliefs, even when there is no value of persuasion under a common prior. Our main condition is that the receiver's action depends on his beliefs only through his expectation of some random variable.

Suggested Citation

  • Alonso, Ricardo & Câmara, Odilon, 2016. "Bayesian persuasion with heterogeneous priors," Journal of Economic Theory, Elsevier, vol. 165(C), pages 672-706.
    • Handle: RePEc:eee:jetheo:v:165:y:2016:i:c:p:672-706
    DOI: 10.1016/j.jet.2016.07.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022053116300497
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jet.2016.07.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    2. Kalai, Ehud & Lehrer, Ehud, 1994. "Weak and strong merging of opinions," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 73-86, January.
    3. Gill, David & Sgroi, Daniel, 2008. "Sequential decisions with tests," Games and Economic Behavior, Elsevier, vol. 63(2), pages 663-678, July.
    4. Yeon-Koo Che & Navin Kartik, 2009. "Opinions as Incentives," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 815-860, October.
    5. Eric Van den Steen, 2011. "Overconfidence by Bayesian-Rational Agents," Management Science, INFORMS, vol. 57(5), pages 884-896, May.
    6. Luis Rayo & Ilya Segal, 2010. "Optimal Information Disclosure," Journal of Political Economy, University of Chicago Press, vol. 118(5), pages 949-987.
    7. Matthew Gentzkow & Jesse M. Shapiro, 2006. "Media Bias and Reputation," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 280-316, April.
    8. Ivanov, Maxim, 2010. "Informational control and organizational design," Journal of Economic Theory, Elsevier, vol. 145(2), pages 721-751, March.
    9. Gill, David & Sgroi, Daniel, 2012. "The optimal choice of pre-launch reviewer," Journal of Economic Theory, Elsevier, vol. 147(3), pages 1247-1260.
    10. Daron Acemoglu & Victor Chernozhukov & Muhamet Yildiz, 2006. "Learning and Disagreement in an Uncertain World," NBER Working Papers 12648, National Bureau of Economic Research, Inc.
    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. Bertelli,Anthony Michael, 2012. "The Political Economy of Public Sector Governance," Cambridge Books, Cambridge University Press, number 9780521736640.
    13. J. Duggan & C. Martinelli, 2011. "A Spatial Theory of Media Slant and Voter Choice," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(2), pages 640-666.
    14. Morris, Stephen, 1994. "Trade with Heterogeneous Prior Beliefs and Asymmetric Information," Econometrica, Econometric Society, vol. 62(6), pages 1327-1347, November.
    15. Kolotilin, Anton, 2015. "Experimental design to persuade," Games and Economic Behavior, Elsevier, vol. 90(C), pages 215-226.
    16. Eric Van den Steen, 2004. "Rational Overoptimism (and Other Biases)," American Economic Review, American Economic Association, vol. 94(4), pages 1141-1151, September.
    17. Yahel Giat & Steve T. Hackman & Ajay Subramanian, 2010. "Investment under Uncertainty, Heterogeneous Beliefs, and Agency Conflicts," The Review of Financial Studies, Society for Financial Studies, vol. 23(4), pages 1360-1404, April.
    18. Alonso, Ricardo & Câmara, Odilon, 2016. "Political disagreement and information in elections," Games and Economic Behavior, Elsevier, vol. 100(C), pages 390-412.
    19. Patton, Andrew J. & Timmermann, Allan, 2010. "Why do forecasters disagree? Lessons from the term structure of cross-sectional dispersion," Journal of Monetary Economics, Elsevier, vol. 57(7), pages 803-820, October.
    20. Hirsch, Alexander V., 2016. "Experimentation and Persuasion in Political Organizations," American Political Science Review, Cambridge University Press, vol. 110(1), pages 68-84, February.
    21. Bertelli,Anthony Michael, 2012. "The Political Economy of Public Sector Governance," Cambridge Books, Cambridge University Press, number 9780521517829.
    22. Eric Van den Steen, 2010. "Interpersonal Authority in a Theory of the Firm," American Economic Review, American Economic Association, vol. 100(1), pages 466-490, March.
    23. Anton Kolotilin, 2013. "Optimal Information Disclosure: Quantity vs. Quality," Discussion Papers 2013-19, School of Economics, The University of New South Wales.
    24. Isabelle Brocas & Juan D. Carrillo, 2007. "Influence through ignorance," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 931-947, December.
    25. Glenn Ellison & Sara Fisher Ellison, 2009. "Search, Obfuscation, and Price Elasticities on the Internet," Econometrica, Econometric Society, vol. 77(2), pages 427-452, March.
    26. Matthew Gentzkow & Emir Kamenica, 2014. "Costly Persuasion," American Economic Review, American Economic Association, vol. 104(5), pages 457-462, May.
    27. Ricardo Alonso & Odilon Câmara, 2016. "Persuading Voters," American Economic Review, American Economic Association, vol. 106(11), pages 3590-3605, November.
    28. Camerer, Colin & Loewenstein, George & Weber, Martin, 1989. "The Curse of Knowledge in Economic Settings: An Experimental Analysis," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1232-1254, October.
    29. Muhamet Yildiz, 2004. "Waiting to Persuade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 223-248.
    30. Morris, Stephen, 1995. "The Common Prior Assumption in Economic Theory," Economics and Philosophy, Cambridge University Press, vol. 11(2), pages 227-253, October.
    31. Eric Van den Steen, 2009. "Authority versus Persuasion," American Economic Review, American Economic Association, vol. 99(2), pages 448-453, May.
    32. Rajiv Sethi & Muhamet Yildiz, 2012. "Public Disagreement," American Economic Journal: Microeconomics, American Economic Association, vol. 4(3), pages 57-95, August.
    33. Eric Van den Steen, 2010. "On the origin of shared beliefs (and corporate culture)," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 617-648, December.
    Full references (including those not matched with items on IDEAS)

    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. Alonso, Ricardo & Câmara, Odilon, 2014. "Persuading skeptics and reaffirming believers," LSE Research Online Documents on Economics 58680, London School of Economics and Political Science, LSE Library.
    2. Hedlund, Jonas, 2017. "Bayesian persuasion by a privately informed sender," Journal of Economic Theory, Elsevier, vol. 167(C), pages 229-268.
    3. Kolotilin, Anton, 2015. "Experimental design to persuade," Games and Economic Behavior, Elsevier, vol. 90(C), pages 215-226.
    4. Hedlund, Jonas, 2014. "Bayesian signaling," Working Papers 0577, University of Heidelberg, Department of Economics.
    5. Rosar, Frank, 2017. "Test design under voluntary participation," Games and Economic Behavior, Elsevier, vol. 104(C), pages 632-655.
    6. Ricardo Alonso & Odilon Câmara, 2016. "Persuading Voters," American Economic Review, American Economic Association, vol. 106(11), pages 3590-3605, November.
    7. 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.
    8. Anton Kolotilin & Tymofiy Mylovanov & Andriy Zapechelnyuk & Ming Li, 2017. "Persuasion of a Privately Informed Receiver," Econometrica, Econometric Society, vol. 85(6), pages 1949-1964, November.
    9. Alonso, Ricardo & Câmara, Odilon, 2018. "On the value of persuasion by experts," Journal of Economic Theory, Elsevier, vol. 174(C), pages 103-123.
    10. Thakor, Anjan V., 2015. "Strategic information disclosure when there is fundamental disagreement," Journal of Financial Intermediation, Elsevier, vol. 24(2), pages 131-153.
    11. Sonin, Konstantin & Egorov, Georgy, 2019. "Persuasion on Networks," CEPR Discussion Papers 13723, C.E.P.R. Discussion Papers.
    12. 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.
    13. Cheng, Ing-Haw & Hsiaw, Alice, 2022. "Distrust in experts and the origins of disagreement," Journal of Economic Theory, Elsevier, vol. 200(C).
    14. Onuchic, Paula & Ray, Debraj, 2023. "Conveying value via categories," Theoretical Economics, Econometric Society, vol. 18(4), November.
    15. Asriyan, Vladimir & Foarta, Dana & Vanasco, Victoria, 2018. "Strategic Complexity When Seeking Approval," Research Papers 3615, Stanford University, Graduate School of Business.
    16. Eric Van den Steen, 2010. "Culture Clash: The Costs and Benefits of Homogeneity," Management Science, INFORMS, vol. 56(10), pages 1718-1738, October.
    17. Xie, Yinxi & Xie, Yang, 2017. "Machiavellian experimentation," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 685-711.
    18. Junze Sun & Arthur Schram & Randolph Sloof, 2019. "A Theory on Media Bias and Elections," Tinbergen Institute Discussion Papers 19-048/I, Tinbergen Institute.
    19. Bruce Carlin & Christopher Cotton & Raphael Boleslavsky, 2017. "Competing For Capital: Auditing And Credibility In Financial Reporting," Working Paper 1377, Economics Department, Queen's University.
    20. Pak Hung Au, 2015. "Dynamic information disclosure," RAND Journal of Economics, RAND Corporation, vol. 46(4), pages 791-823, October.

    More about this item

    Keywords

    Persuasion; Strategic experimentation; Heterogeneous priors;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    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:eee:jetheo:v:165:y:2016:i:c:p:672-706. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622869 .

    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.