Persuasion with Limited Communication Capacity

64 Pages Posted: 8 Dec 2017 Last revised: 16 Dec 2017

See all articles by Maël Le Treust

Maël Le Treust

ENSEA/ETIS - UMR CNRS 8051

Tristan Tomala

HEC Paris - Economics & Decision Sciences

Date Written: December 15, 2017

Abstract

We consider a Bayesian persuasion problem where the persuader and the decision maker communicate through an imperfect channel which has a fixed and limited number of messages and is subject to exogenous noise. Imperfect communication entails a loss of payoff for the persuader. We establish an upper bound on the payoffs the persuader can secure by communicating through the channel. We also show that the bound is tight: if the persuasion problem consists of a large number of independent copies of the same base problem, then the persuader can achieve this bound arbitrarily closely by using strategies which tie all the problems together. We characterize this optimal payoff as a function of the information-theoretic capacity of the communication channel.

JEL Classification: C72, D82, D83

Suggested Citation

Le Treust, Maël and Tomala, Tristan, Persuasion with Limited Communication Capacity (December 15, 2017). HEC Paris Research Paper No. ECO/SCD-2017-1244. Available at SSRN: https://ssrn.com/abstract=3083932 or http://dx.doi.org/10.2139/ssrn.3083932

Maël Le Treust (Contact Author)

ENSEA/ETIS - UMR CNRS 8051 ( email )

6, avenue du Ponceau
Cergy-Pontoise, 95014
France

Tristan Tomala

HEC Paris - Economics & Decision Sciences ( email )

1 rue de la Liberation
Paris, 78351
France

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