Abstract
In the context of Bayesian Persuasion (Kamenica and Gentzkow in Am Econ Rev 101:2590-2615, 2011), typically, a biased Sender designs a signal to influence the binary decision of an unbiased Receiver. Can the Receiver improve her payoffs by adopting a resistance strategy, i.e., by committing into incurring (deterministic or stochastic) costs if she picks the Sender-preferred action? We argue that deterministic resistance strategies cannot improve the Receiver's payoffs, whereas stochastic resistance strategies can increase both the informativeness of the signal and the Receiver's payoffs. We fully characterize the optimal resistance strategy and show that it always induces a substantial increase in the Receiver's welfare, as well as a perfectly informative signal.
| Original language | English |
|---|---|
| Pages (from-to) | 723-742 |
| Number of pages | 20 |
| Journal | Economic Theory |
| Volume | 72 |
| Issue number | 3 |
| Early online date | 10 Jan 2021 |
| DOIs | |
| Publication status | Published - Oct 2021 |
JEL classifications
- d72 - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- d82 - "Asymmetric and Private Information; Mechanism Design"
- d83 - "Search; Learning; Information and Knowledge; Communication; Belief"
- k40 - Legal Procedure, the Legal System, and Illegal Behavior: General
- m38 - Marketing and Advertising: Government Policy and Regulation
Keywords
- Bayesian persuasion
- Resistance
- Uncertainty
- Money burning
- BAYESIAN PERSUASION
- PUBLIC COMMITMENT
- NORMATIVE INFLUENCE
- ATTITUDE CERTAINTY
- CHEAP TALK
- SUSCEPTIBILITY
- CONSISTENCY
- RESISTANCE
- PREFERENCE