'Persuasion for the Long Run' (joint work with Dan Quigley)

  • 17 Oct 2017

    12:30-14:15, Butler Room, Nuffield College

  • Economic Theory Lunchtime Workshop   Add to Calendar
Speaker: James Best

This event is part of the Economic Theory Lunchtime Workshop series.

We examine a persuasion game where concerns about future credibility are the sole source of current credibility. A long-run sender plays a cheap talk game with a sequence of short-run receivers. Even with perfect monitoring, long-run incentives do not perfectly substitute for ex-ante commitment to reporting strategies at the stage game. We then show that different methods of augmenting or garbling history can better harness long-run incentives and expand the Pareto frontier. In particular, a 'review aggregator' can implement average payoffs and information structures arbitrarily close to those available under ex-ante commitment. Finally, we examine applications to e-commerce and finance.

The Economic Theory Lunchtime Workshops are convened by Meg Meyer