Paying and Persuading

Daniel Luo

Papers from arXiv.org

Abstract: I study the joint design of information and transfers when an informed Sender can motivate Receiver by both paying and (Bayesian) persuading. I introduce a generalized concavification method to characterize Sender's value function when they can flexibly influence Receiver incentives directly. This characterization implies empirically verifiable conditions under which Sender strictly prefers access to the joint design of information and transfers. When Sender and Receiver interact repeatedly, Sender pays Receiver only when informational incentives are exhausted, highlighting a stark substitution effect between payments and persuasion as dynamic incentive tools. I conclude by discussing implications of my results for project selection in organizations, pricing for advertisements, and rideshare design.

Date: 2025-03, Revised 2025-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2503.06007 Latest version (application/pdf)

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: https://EconPapers.repec.org/RePEc:arx:papers:2503.06007

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().