Information transmission in persuasion models with imperfect verification

Francisco Silva

Theoretical Economics, 2024, vol. 19, issue 3

Abstract: I study a persuasion game between a privately informed agent and a decision maker (DM) who can imperfectly verify the statements made by the agent by observing a signal that is correlated with the agent's information. I find that whether or not the DM benefits from communicating with the agent depends on whether the DM's signal and the agent's private information satisfy a weak affiliation condition. I then discuss the significance of this result to the debate over the use of self-appraisals in business. I argue that, in general, self-appraisals are only useful when the workers' abilities are multidimensional.

Keywords: Communication; verification; self-appraisals; mechanism design (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2024-07-24
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