Abstract
This paper addresses a common criticism of certi fication processes: that they simultaneously generate excessive complexity, insufficient scrutiny and high rates of undue validation. We build a model of persuasion in which low and high types pool on their choice of complexity. A natural criterion based on forward induction selects the high-type optimal pooling equilibrium. More complexity always leads to lower scrutiny by the receiver because it makes understanding marginally more costly. When the receiver is biased towards rejection, more complexity also makes the receiver more selective, and the sender simplifies her report in equilibrium. When the receiver is biased towards validation, however, more complexity makes the receiver less selective, and we provide sufficient conditions that lead to complexity inflation in equilibrium.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
