Persuasion, binary choice, and the costs of dishonesty

Roland Hodler, Simon Loertscher and Dominic Rohner

Economics Letters, 2014, vol. 124, issue 2, 195-198

Abstract: We study the strategic interaction between a decision maker who needs to take a binary decision but is uncertain about relevant facts and an informed expert who can send a message to the decision maker but has a preference over the decision. We show that the probability that the expert can persuade the decision maker to take the expert’s preferred decision is a hump-shaped function of his costs of sending dishonest messages.

Keywords: Persuasion; Costly signaling; Expert advice; Information distortion (search for similar items in EconPapers)
JEL-codes: C72 D72 D82 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:124:y:2014:i:2:p:195-198

DOI: 10.1016/j.econlet.2014.05.013

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