Persuading a Wishful Thinker

TL;DR

This paper explores how a sender can design information to persuade a wishful thinker, who overestimates favorable outcomes, revealing that wishful thinking significantly alters optimal persuasion strategies compared to Bayesian models.

Contribution

It introduces a model of persuasion involving wishful thinkers, showing how their overoptimism changes the structure of optimal information design.

Findings

Wishful thinking causes qualitative shifts in optimal persuasion strategies.

Uncertainty about the receiver's perception of best outcomes is crucial.

Optimal persuasion differs markedly from Bayesian scenarios.

Abstract

We study a persuasion problem in which a sender designs an information structure to induce a non-Bayesian receiver to take a particular action. The receiver, who is privately informed about his preferences, is a wishful thinker: he is systematically overoptimistic about the most favorable outcomes. We show that wishful thinking can lead to a qualitative shift in the structure of optimal persuasion compared to the Bayesian case, whenever the sender is uncertain about what the receiver perceives as the best-case outcome in his decision problem.