Information design with frame choice

Yulia Evsyukova, Federico Innocenti and Niccolò Lomys

No 24-084, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We study how framing interplays with information design. Whereas Sender conceives all contingencies separately, Receiver cannot initially distinguish among some of them, i.e., has a coarse frame. To influence Receiver's behavior, Sender first decides whether to refine Receiver's frame and then designs an information structure for the chosen frame. Sender faces a trade-off between keeping Receiver under the coarse frame - thus concealing part of the information structure - and re-framing - hence inducing Receiver to revise preferences and prior beliefs after telling apart initially indistinguishable contingencies. Sender benefits from re-framing if this enhances persuasion possibilities or makes persuasion unnecessary. Compared to classical information design, Receiver's frame becomes more critical than preferences and prior beliefs in shaping the optimal information structure. Although a coarse worldview may open the doors to Receiver's exploitation, re-framing can harm Receiver in practice, thus questioning the scope of disclosure policies.

Keywords: Framing; Information Design; Disclosure Policies (search for similar items in EconPapers)
JEL-codes: D1 D8 D9 G2 G4 M3 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:312572

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