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What is Bayesian Persuasion and Costly State Verification about?

This paper examines a model of Bayesian persuasion where a sender influences a decision-maker who can verify the true state of the world at a cost. The study identifies the trade-offs between information revelation and verification, showing that verification can lead to more informative signaling and higher welfare for the decision-maker. The analysis provides conditions under which the introduction of verification improves outcomes compared to traditional persuasion models.

Author

bailid697

Language

EN