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Bayesian Persuasion

Listed author(s):
  • Emir Kamenica
  • Matthew Gentzkow

When is it possible for one person to persuade another to change her action? We take a mechanism design approach to this question. Taking preferences and initial beliefs as given, we introduce the notion of a persuasion mechanism: a game between Sender and Receiver defined by an information structure and a message technology. We derive necessary and sufficient conditions for the existence of a persuasion mechanism that strictly benefits Sender. We characterize the optimal mechanism. Finally, we analyze several examples that illustrate the applicability of our results.

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File URL: http://www.nber.org/papers/w15540.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15540.

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Date of creation: Nov 2009
Publication status: published as “Bayesian Persuasion” (with Emir Kamenica). American Economic Review . 101(6). October 2011.
Handle: RePEc:nbr:nberwo:15540
Note: IO POL
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