Persuasion with correlation neglect: a full manipulation result

Levy, Gilat ORCID: 0009-0006-7641-1668, Moreno de Barreda, Inés and Razin, Ronny ORCID: 0009-0009-5169-0180 (2022) Persuasion with correlation neglect: a full manipulation result. American Economic Review: Insights, 4 (1). 123 - 138. ISSN 2640-205X

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Abstract

We consider an information design problem in which a sender tries to persuade a receiver that has "correlation neglect", i.e. fails to understand that signals might be correlated. We show that a sender with unlimited number of signals can fully manipulate the receiver. Specifically, the sender can induce the receiver to hold any state-dependent posterior she wishes to. If the sender only wishes to induce a state-independent posterior, she can use fully correlated signals, but generally she needs to design more involved correlation structures.

Item Type:	Article
Official URL:	https://www.aeaweb.org/journals/aeri
Additional Information:	© 2022 American Economic Association
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited:	05 Aug 2021 14:06
Last Modified:	12 Dec 2024 02:36
URI:	http://eprints.lse.ac.uk/id/eprint/111551

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