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Persuasion with correlation neglect: a full manipulation result

Levy, Gilat, Moreno de Barreda, Inés and Razin, Ronny (2021) Persuasion with correlation neglect: a full manipulation result. American Economic Review: Insights. ISSN 2640-2068 (In Press)

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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: © 2021 American Economic Association
Divisions: Economics
LSE
Subjects: H Social Sciences > HB Economic Theory
Date Deposited: 05 Aug 2021 14:06
Last Modified: 21 Aug 2021 23:16
URI: http://eprints.lse.ac.uk/id/eprint/111551

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