Economics at your fingertips  

The Simple Economics of Optimal Persuasion

Piotr Dworczak () and Giorgio Martini

Journal of Political Economy, 2019, vol. 127, issue 5, 1993 - 2048

Abstract: We propose a price-theoretic approach to Bayesian persuasion by establishing an analogy between the sender’s problem and finding Walrasian equilibria of a persuasion economy. The sender, who acts as a consumer, purchases posterior beliefs at their prices using the prior distribution as her endowment. A single firm has the technology to garble the state. Welfare theorems provide a verification tool for optimality of a persuasion scheme and characterize the structure of prices that support the optimal solution. This approach yields a tractable solution method for persuasion problems in which the sender’s utility depends only on the expected state.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (38) Track citations by RSS feed

Downloads: (external link) (application/pdf) (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

Page updated 2022-05-27
Handle: RePEc:ucp:jpolec:doi:10.1086/701813