Persuasion with correlation neglect: a full manipulation result

Gilat Levy, Ines Moreno de Barreda and Ronny Razin

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We consider an information design problem in which a sender tries to persuade a receiver that has "correlation neglect", i.e. fails to understand that signals might be correlated. We show that a sender with unlimited number of signals can fully manipulate the receiver. Specifically, the sender can induce the receiver to hold any state-dependent posterior she wishes to. If the sender only wishes to induce a state-independent posterior, she can use fully correlated signals, but generally she needs to design more involved correlation structures.

JEL-codes: D82 D83 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2022-03-01
New Economics Papers: this item is included in nep-gth, nep-isf and nep-mic
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Published in American Economic Review: Insights, 1, March, 2022, 4(1), pp. 123 - 138. ISSN: 2640-205X

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http://eprints.lse.ac.uk/111551/ Open access version. (application/pdf)

Related works:
Journal Article: Persuasion with Correlation Neglect: A Full Manipulation Result (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:111551

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