Who is Afraid of Bayesian Persuasion?

11 Pages Posted: 8 Jun 2018

See all articles by Luc Lauwers

Luc Lauwers

KU Leuven - Center for Economic Studies

Patrick J. G. Van Cayseele

KU Leuven - Department of Economics

Date Written: June 7, 2018

Abstract

Bayesian persuasion (Kamenica and Gentzkow 2011) refers to the optimal signalling of a Sender with informational advantage over the Receiver, under the constraint that the expected posterior (over the state space) equals the common prior. In the basic example of a judicial system with a prosecutor (Sender) and a judge (Receiver) who needs to convict or acquit a defendant, the mechanism of Bayesian persuasion entails the detriment of the third party (absent in the model): innocent subjects who get convicted suffer from this optimal signalling scheme. If the judge is concerned about errors of convicting innocent defendants, or about the overall sustainability of the judicial system, then different outcomes may arise.

Keywords: Bayesian persuasion, Blackstone ratio

JEL Classification: C72, K40 en K41

Suggested Citation

Lauwers, Luc and Van Cayseele, Patrick G. J., Who is Afraid of Bayesian Persuasion? (June 7, 2018). Amsterdam Law School Research Paper No. 2018-11; Amsterdam Center for Law & Economics Working Paper No. 2018-04. Available at SSRN: https://ssrn.com/abstract=3192440 or http://dx.doi.org/10.2139/ssrn.3192440

Luc Lauwers (Contact Author)

KU Leuven - Center for Economic Studies ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Patrick G. J. Van Cayseele

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium
+32-16-326830 (Phone)
+32-16-326796 (Fax)

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