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Inform and Persuade

Author

Listed:
  • Joshua Bißbort
  • Daniel Heyen
  • Soheil Shayegh

Abstract

Advice plays a central role in health, personal finance, and energy-efficiency decisions. We study how a benevolent expert should design verifiable advice—such as whether to commission a diagnostic test of different accuracy—when the agent is behaviorally biased, either neglecting payoff-relevant considerations or updating beliefs in a systematic, non-Bayesian way. The expert both informs the agent about underlying risk and persuades the agent away from choices driven by bias. In a Bayesian persuasion framework with a binary safe-versus-risky decision and moderate (monotone) distortions, we show that the expert’s payoff need not be monotone in informativeness: intermediate information can reduce welfare relative to no information. Nonetheless, full disclosure remains optimal.

Suggested Citation

  • Joshua Bißbort & Daniel Heyen & Soheil Shayegh, 2026. "Inform and Persuade," CESifo Working Paper Series 12482, CESifo.
    • Handle: RePEc:ces:ceswps:_12482
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    Keywords

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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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