Persuasion for the Long-Run

Event Date: 25 October 2017

Speaker: James Best, Oxford University

Time: 4.15 PM

Location: Strathclyde Business School, Cathedral Wing, CW507b

Title:   Persuasion for the Long-Run

Abstract:

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.

Published: 19 October 2017