On the Robustness of Strategic Experimentation to Persuasive Cheap Talk

Abstract

This paper develops a model in which a privately informed seller attempts to indirectly influence the experimentation strategy of a buyer by sending costless signals. The question under consideration is whether there is any credible way in which this single rational seller could influence the buyer’s decisions. We provide bounds on information transmission in equilibrium, and show that there exists no reporting strategy for the seller which changes the experimentation strategy of the buyer. These results demonstrate the robustness of a class of learning models to coercion.