Lying in Persuasion

Abstract

We develop a model where the speaker obtains information about which they can lie to persuade the audience. The option to lie, when exercised on the equilibrium path, incentivizes the speaker to seek more persuasive information. However, the conditions under which this happens are surprisingly restrictive: the risk that the speaker’s lie will be exposed must be neither too small nor too large and the audience must be sufficiently inclined ex ante to do what the speaker is asking – lying is used to nudge, not to push. The option to lie impairs persuasion even when, and especially when, it is not exercised. It motivates the audience to be instrumentally skeptical and to disbelieve the speaker who is telling the truth. We apply the model to articulate the sources of news bias in partisan media and to assess the role of fact-checking in curtailing misinformation.