Tuesday, December 11, 2007

Caillaud and Tirole on Group Persuasion

A paper by Caillaud and Tirole in the current AER (gated link) extends the analysis of sender-receiver games to study group persuasion. They motivate the paper with the example of the sponsor of a policy proposal attempting to persuade a committee. Here's the abstract:

The paper explores strategies that the sponsor of a proposal may employ to convince a qualified majority of members in a group to approve the proposal. Adopting a mechanism design approach to communication, it emphasizes the need to distill information selectively to key group members and to engineer persuasion cascades in which members who are brought on board sway the opinion of others. The paper shows that higher congruence among group members benefits the sponsor. The extent of congruence between the group and the sponsor, and the size and the governance of the group, are also shown to condition the sponsor’s ability to get his project approved.


And here are some of their counterintuitive results:

We showed that adding veto powers may actually help the sponsor, while an increase in external congruence [of preferences among the sponsor and committee members] may hurt him; that a [committee member with more congruent preferences to the sponsor] may be worse off than an a priori more dissonant member; and that, provided that he can control channels of communication, the sponsor may gain from creating ambiguity as to whether other members really are on board. Finally, an increase in internal congruence [of preferences among committee members] always benefits the sponsor.


On a technical note, they do not specify a game form but rather study the communication mechanisms that are optimal for the sponsor in his effort to win approval from the committee. The empirical content of the model includes some comparative statics on how size, preference congruence, and voting rules affect the likelihood of proposal acceptance and thus the stability of the policy status quo.

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