How Bayesian Persuasion Can Help Reduce Illegal Parking and Other Socially Undesirable Behavior
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Penélope Hernández
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Zvika Neeman
- American Economic Journal: Microeconomics (Forthcoming)
Abstract
We consider the question of how best to allocate enforcement resources
across different locations with the goal of deterring unwanted behaviour.
We rely on “Bayesian persuasion” to improve deterrence. We focus on
the case where agents care only about the expected amount of enforcement
resources given messages received. Optimization in the space of
induced mean posterior beliefs involves a partial convexification of the
objective function. We describe interpretable conditions under which it
is possible to explicitly solve the problem with only two messages: “high
enforcement” and “enforcement as usual.” We also provide a tight upper
bound on the total number of messages needed to achieve the optimal
solution in the general case, as well as a general example that attains this
bound.
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