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  • January 2021
  • Article
  • American Economic Review

Using Models to Persuade

By: Joshua Schwartzstein and Adi Sunderam
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Abstract

We present a framework where "model persuaders" influence receivers’ beliefs by proposing models that organize past data to make predictions. Receivers are assumed to find models more compelling when they better explain the data, fixing receivers’ prior beliefs. Model persuaders face a tradeoff: better-fitting models induce less movement in receivers’ beliefs. Consequently, a receiver exposed to the true model can be most misled by persuasion when that model fits poorly, competition between persuaders tends to neutralize the data by pushing towards better-fitting models, and a persuader facing multiple receivers is more effective when he can send tailored, private messages.

Keywords

Model Persuasion; Data and Data Sets; Forecasting and Prediction; Mathematical Methods; Framework

Citation

Schwartzstein, Joshua, and Adi Sunderam. "Using Models to Persuade." American Economic Review 111, no. 1 (January 2021): 276–323.
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About The Authors

Joshua R. Schwartzstein

Negotiation, Organizations & Markets
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Adi Sunderam

Finance
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    The Cross Section of Bank Value

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    Value-Based Insurance Design at Onex

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    Segmented Arbitrage

    By: Emil Siriwardane, Adi Sunderam and Jonathan Wallen
More from the Authors
  • The Cross Section of Bank Value By: Mark Egan, Stefan Lewellen and Adi Sunderam
  • Value-Based Insurance Design at Onex By: Joshua Schwartzstein, Amitabh Chandra and Amram Migdal
  • Segmented Arbitrage By: Emil Siriwardane, Adi Sunderam and Jonathan Wallen
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