Influencing the Misinformed Behavior

Francesca Barigozzi and Bertrand Villeneuve

No 979, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: In many instances where public policy concerning externalities is considered, ensuring an adequate perception of the public is not less important than setting ideal taxes. We show however that public authorities are typically incited to deliver biased information (exaggeration or attenuation) to economize on the coercive instruments. Technically, we solve of model of signal cum cheap-talk. Anti-smoking campaigns and policy against antibiotics over-consumption serve as illustrations of our points.

Date: 2000-08-01
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