Pandering to Persuade

60 Pages Posted: 24 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 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: Decision processes, Delegation, Multi-dimensional cheap talk, Pandering, Persuasion, Resource allocation

JEL Classification: D7, D83, L2

Suggested Citation

Che, Yeon-Koo and Dessein, Wouter and Kartik, Navin, Pandering to Persuade (August 2010). CEPR Discussion Paper No. DP7970, Available at SSRN: https://ssrn.com/abstract=1661573

Yeon-Koo Che (Contact Author)

Columbia University ( email )

420 W. 118th Street, 1016IAB
New York, NY 10027
United States
212-854-8276 (Phone)

HOME PAGE: http://www.columbia.edu/~yc2271

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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