Persuasion in Networks: Can the Sender Do Better than Using Public Signals?

Yifan Zhang

Papers from arXiv.org

Abstract: Political and advertising campaigns increasingly exploit social networks to spread information and persuade people. This paper studies a persuasion model to examine whether such a strategy is better than simply sending public signals. Receivers in the model have heterogeneous priors and will pass on a signal if they are persuaded by it to take sender's preferred action. I show that a risk neutral or risk loving sender prefers to use public signals, unless more skeptical receivers are sufficiently more connected in the network. A risk averse sender may prefer to exploit the network. These results still hold when the network exhibits homophily.

Date: 2024-04, Revised 2024-12
New Economics Papers: this item is included in nep-gth, nep-mic, nep-net and nep-ure
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