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Using Models to Persuade (2021)

Schwartzstein, Joshua ; Sunderam, Adi

American Economic Association

In: American Economic Review. 2021; 111(1): 276-323. Published 2021 Jan 01. doi: 10.1257/aer.20191074.

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Publication Date: 2021-01-01

Description: We present a framework where “model persuaders” influence receivers’ beliefs by proposing models that organize past data to make predictions. Receivers are assumed to find models more compelling when they better explain the data, fixing receivers’ prior beliefs. Model persuaders face a trade-off: better-fitting models induce less movement in receivers’ beliefs. Consequently, a receiver exposed to the true model can be most misled by persuasion when that model fits poorly, competition between persuaders tends to neutralize the data by pushing toward better-fitting models, and a persuader facing multiple receivers is more effective when he can send tailored, private messages. (JEL C50, D82, D83)

Print ISSN: 0002-8282

Electronic ISSN: 1944-7981

Topics: Economics

Published by American Economic Association

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