Persuading a Wishful Thinker

Victor Augias and Daniel M. A. Barreto

Papers from arXiv.org

Abstract: We study a persuasion problem in which a sender designs an information structure to induce a non-Bayesian receiver to take a particular action. The receiver, who is privately informed about his preferences, is a wishful thinker: he is systematically overoptimistic about the most favorable outcomes. We show that wishful thinking can lead to a qualitative shift in the structure of optimal persuasion compared to the Bayesian case, whenever the sender is uncertain about what the receiver perceives as the best-case outcome in his decision problem.

Date: 2020-11, Revised 2023-11
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-upt
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