Persuasion with Non-Linear Preferences

Anton Kolotilin, Roberto Corrao and Alexander Wolitzky

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Abstract: In persuasion problems where the receiver's action is one-dimensional and his utility is single-peaked, optimal signals are characterized by duality, based on a first-order approach to the receiver's problem. A signal is optimal iff the induced joint distribution over states and actions is supported on a compact set (the contact set) where the dual constraint binds. A signal that pools at most two states in each realization is always optimal, and such pairwise signals are the only solutions under a non-singularity condition on utilities (the twist condition). We provide conditions under which higher actions are induced at more or less extreme pairs of states. Finally, we provide conditions for the optimality of either full disclosure or negative assortative disclosure, where signal realizations can be ordered from least to most extreme. Optimal negative assortative disclosure is characterized as the solution to a pair of ordinary differential equations.

Date: 2022-06, Revised 2022-08
New Economics Papers: this item is included in nep-cta, nep-des, nep-mic and nep-upt
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Citations: View citations in EconPapers (3)

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Working Paper: Persuasion with Non-Linear Preferences (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2206.09164

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