DP13723 Persuasion on Networks

Author(s):	Georgy Egorov, Konstantin Sonin
Publication Date:	May 2019
Date Revised:	July 2020
Keyword(s):	Bayesian persuasion, networks, percolation, Propaganda
JEL(s):	D85, L82, P16
Programme Areas:	Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=13723

We analyze persuasion in a model, in which each receiver might buy a direct access to the sender's signal or to rely on her network connections to get it. For the sender, a higher slant increases the impact per direct receiver, yet diminishes the willingness of agents to receive information. Contrary to naive intuition, the optimal propaganda might target peripheral, rather than centrally-located agents, and is at its maximum levels when the probability that information flows between agents is close to zero or nearly one, but not in-between. The impact of the network density depends on this probability as well.