Persuasive communication when the sender's incentives are uncertain

Abstract

We study persuasion in a modified Crawford–Sobel sender–receiver game in which the receiver makes a binary decision to accept or reject a good recommended by the sender. The good's quality and the sender's type (neutral or biased) are not observable to the receiver. These alterations yield a simple model and a unique truth-telling equilibrium in which neutral senders who observe different qualities fully separate but can only communicate low quality levels accurately. Biased senders adopt a mixed strategy that can successfully persuade the receiver to accept the good most of the time. When the sender's degree of bias is continuously distributed, a truth-telling equilibrium does not exist. Nonetheless, a partition equilibrium exists for any given number of partitions on the message space.