CFDP 2272

Bayesian Persuasion with Lie Detection

Author(s): 

Publication Date: January 2021

Pages: 26

Abstract: 

We consider a model of Bayesian persuasion in which the Receiver can detect lies with positive probability. We show that the Sender lies more when the lie detection probability increases. As long as the lie detection probability is sufficiently small the Sender’s and the Receiver’s equilibrium payoffs are unaffected by the lie detection technology because the Sender simply compensates by lying more. When the lie detection probability is sufficiently high, the Sender’s (Receiver’s) equilibrium payoff decreases (increases) with the lie detection probability.

Keywords: Bayesian persuasion, Lying, Communication, Lie detection

JEL Classification Codes: D83, D82, K40, D72

JEL Classification Codes: D83D82K40D72

PDF: 
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