Competition in Persuasion: An Experiment

41 Pages Posted: 20 Sep 2021 Last revised: 12 Oct 2021

See all articles by Wenhao Wu

Wenhao Wu

School of Entrepreneurship and Management, ShanghaiTech University

Bohan Ye

University of Southern Indiana - School of Business

Date Written: September 18, 2021

Abstract

We experimentally investigate a classic question, whether competition stimulates information revelation, by comparing two Bayesian persuasion models. One model has one sender (Kamenica and Gentzkow, 2011) and the other has two competing senders who reveal information sequentially and publicly (Wu, 2020). The first treatment provides strong support for Kamenica and Gentzkow (2011), where the sender uses a noisy signaling device and the receiver complies with his suggestions. In the second treatment, we find that: (1) senders reveal more information in total than the sender in the first treatment; (2) the first sender reduces the use of the noisy signaling device as compared to the sender in the first treatment; (3) the second sender exhibits a “matching” behavior pattern; (4) the receiver can make use of information from both sides and she receives higher payoffs than in the first treatment. However, our experiment also documents deviations from the theory. Competition does not improve information revelation to the extent of full information. To rationalize the behavior, we use the Quantal Response Equilibrium model to explain the features of the empirical results in our experiment.

Keywords: Bayesian Persuasion, Multiple Senders, Laboratory Experiment, Quantal Response Equilibrium

JEL Classification: C72, C92, D83

Suggested Citation

Wu, Wenhao and Ye, Bohan, Competition in Persuasion: An Experiment (September 18, 2021). ShanghaiTech SEM Working Paper No. 2021-010, Available at SSRN: https://ssrn.com/abstract=3926191 or http://dx.doi.org/10.2139/ssrn.3926191

Wenhao Wu

School of Entrepreneurship and Management, ShanghaiTech University ( email )

393 Middle Huaxia Road, Pudong
Shanghai, 201210
China

Bohan Ye (Contact Author)

University of Southern Indiana - School of Business ( email )

Evansville, IN 47712
United States
8124641806 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
26
Abstract Views
237
PlumX Metrics