Bayesian Persuasion - Stanford University

American Economic Review 101 (October 2011): 2590 2615 one person, call him Sender, wishes to persuade another, call her Receiver, to change her action. If Receiver is a rational Bayesian , can Sender per-suade her to take an action he would prefer over the action she was originally going to take? If Receiver understands that Sender chose what information to convey with the intent of manipulating her action for his own benefit, can Sender still gain from Persuasion ? If so, what is the optimal way to persuade?These questions are of substantial economic importance. As Donald McCloskey and Arjo Klamer (1995) emphasize, attempts at Persuasion command a sizable share of our resources. Persuasion , as we will define it below, plays an important role in advertising, courts, lobbying, financial disclosure, and political campaigns, among many other economic the example of a prosecutor trying to convince a judge that a defendant is guilty.

Bayesian Persuasion† By Emir Kamenica and Matthew Gentzkow* When is it possible for one person to persuade another to change her action? We consider a symmetric information model where a sender chooses a signal to reveal to a receiver, who then takes a noncon-tractible action that affects the welfare of both players. We derive

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  Bayesian, Persuasion, Bayesian persuasion

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