I analyse the optimal persuasion strategy of a sponsor to obtain approval from a committee with affiliated benefits, heterogeneous abilities to acquire information, and reputational concerns. I uncover the effect of reputational concerns on the behaviour of committee members and new persuasion strategies of the sponsor. Committee members trade off a lower expected project payoff for a higher reputational payoff. The sponsor employs a persuasion cascade strategy where she requests approval first from a sceptical or high-reputation member, whose approval is the most convincing signal to a member next in line that he stands to gain from the project. Alternatively, her strategy is to request approval first from a low-reputation member to reduce his expected project payoff, thereby increasing the relative strength of his incentive to approve and obtain a higher reputational payoff.

Karamychev, V.
hdl.handle.net/2105/44220
Business Economics
Erasmus School of Economics

d'Hond, M. (2018, November 22). Persuasion strategies for a committee with reputational concerns. Business Economics. Retrieved from http://hdl.handle.net/2105/44220