Persuasion with correlation neglect:a full manipulation result

Levy, GilatORCID logo; Moreno de Barreda, Inés; and Razin, RonnyORCID logo (2022) Persuasion with correlation neglect:a full manipulation result. American Economic Review: Insights, 4 (1). 123 - 138. ISSN 2640-205X
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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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