Persuasion with correlation neglect: a full manipulation result

Levy, G.ORCID logo, Moreno de Barreda, I. & Razin, R.ORCID logo (2022). Persuasion with correlation neglect: a full manipulation result. American Economic Review: Insights, 4(1), 123 - 138. https://doi.org/10.1257/aeri.20210007
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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.

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