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.