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Information transmission in persuasion models with imperfect verification

Author

Listed:
  • Silva, Francisco

    (Department of Economics, Deakin University)

Abstract

I study a persuasion game between a privately informed agent and a decision maker (DM) who can imperfectly verify the statements made by the agent by observing a signal that is correlated with the agent's information. I find that whether or not the DM benefits from communicating with the agent depends on whether the DM's signal and the agent's private information satisfy a weak affiliation condition. I then discuss the significance of this result to the debate over the use of self-appraisals in business. I argue that, in general, self-appraisals are only useful when the workers' abilities are multidimensional.

Suggested Citation

  • Silva, Francisco, 2024. "Information transmission in persuasion models with imperfect verification," Theoretical Economics, Econometric Society, vol. 19(3), July.
    • Handle: RePEc:the:publsh:5578
    as

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    References listed on IDEAS

    as
    1. Junichiro Ishida & Takashi Shimizu, 2019. "Cheap talk when the receiver has uncertain information sources," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 68(2), pages 303-334, September.
    2. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    3. Silva, Francisco, 2019. "Renegotiation proof mechanism design with imperfect type verification," Theoretical Economics, Econometric Society, vol. 14(3), July.
    4. Francisco Silva, 2020. "The Importance of Commitment Power in Games with Imperfect Evidence," American Economic Journal: Microeconomics, American Economic Association, vol. 12(4), pages 99-113, November.
    5. Jacob Glazer & Ariel Rubinstein, 2004. "On Optimal Rules of Persuasion," Econometrica, Econometric Society, vol. 72(6), pages 1715-1736, November.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

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

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