Pandering to Persuade

57 Pages Posted: 9 Aug 2010

See all articles by Yeon-Koo Che

Yeon-Koo Che

Columbia University

Wouter Dessein

Columbia Business School - Finance and Economics

Navin Kartik

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Date Written: August 5, 2010

Abstract

A principal chooses one of n ≥ 2 projects or an outside option. An agent is privately informed about the projects’ benefits and shares the principal’s preferences except for not internalizing her value from the outside option. We show that strategic communication is characterized by pandering: the agent biases his recommendation toward good-looking projects - those with appealing observable attributes - even when both parties would be better off with some other project. Projects become more acceptable when pitched against a stronger slate of alternatives. We study organizational responses to the pandering distortion, such as delegation and choosing to be less informed.

Keywords: strategic communication, outside option, pandering, delegation

JEL Classification: D82, D23, L22

Suggested Citation

Che, Yeon-Koo and Dessein, Wouter and Kartik, Navin, Pandering to Persuade (August 5, 2010). Available at SSRN: https://ssrn.com/abstract=1654210 or http://dx.doi.org/10.2139/ssrn.1654210

Yeon-Koo Che (Contact Author)

Columbia University ( email )

420 W. 118th Street
New York, NY 10027

Wouter Dessein

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

Navin Kartik

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

HOME PAGE: http://www.Columbia.edu/~nk2339

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