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Complicating to Persuade?

Author

Listed:
  • Eduardo Perez

    (Département d'économie)

  • Delphine Prady

    (Direction générale du Trésor et de la Politique Economique (DGTPE))

Abstract

This paper addresses a common criticism of certification processes: that they simultaneously generate excessive complexity, insufficient scrutiny and high rates of undue validation. We build a model of persuasion in which low and high types pool on their choice of complexity. A natural criterion based on forward induction selects the high-type optimal pooling equilibrium.When the receiver prefers rejection ex ante, the sender simplifies her report. When the receiver prefers validation ex ante, however, more complexity makes the receiver less selective, and we provide sufficient conditions that lead to complexity inflation in equilibrium.

Suggested Citation

  • Eduardo Perez & Delphine Prady, 2012. "Complicating to Persuade?," Sciences Po publications info:hdl:2441/5mao0mthj59, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/5mao0mthj59eebth5kqjqgtghb
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Kolotilin, Anton, 2015. "Experimental design to persuade," Games and Economic Behavior, Elsevier, vol. 90(C), pages 215-226.
    2. Eduardo Perez-Richet, 2014. "Interim Bayesian Persuasion: First Steps," American Economic Review, American Economic Association, vol. 104(5), pages 469-474, May.
    3. 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.
    4. Andrew Rhodes & Chris M. Wilson, 2018. "False advertising," RAND Journal of Economics, RAND Corporation, vol. 49(2), pages 348-369, June.
    5. Aka, Joël, 2017. "Market approval of phytosanitary active substances in Europe: An empirical duration analysis," Food Policy, Elsevier, vol. 68(C), pages 143-153.
    6. Mike Felgenhauer, 2019. "Endogenous Persuasion with Costly Verification," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1054-1087, July.
    7. Rosar, Frank, 2017. "Test design under voluntary participation," Games and Economic Behavior, Elsevier, vol. 104(C), pages 632-655.
    8. Hedlund, Jonas, 2015. "Persuasion with communication costs," Games and Economic Behavior, Elsevier, vol. 92(C), pages 28-40.
    9. Shih-Tang Su & Vijay G. Subramanian & Grant Schoenebeck, 2021. "Bayesian Persuasion in Sequential Trials," Papers 2110.09594, arXiv.org, revised Nov 2021.
    10. repec:hal:spmain:info:hdl:2441/17ekir5v8r8l6qbj0nnrfv4k2h is not listed on IDEAS

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    More about this item

    Keywords

    Complexity inflation; Certification; Persuasion; Strategic information transmission; Signaling games;
    All these keywords.

    JEL classification:

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

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