Continuous-time persuasion by filtering

René Aïd, Ofelia Bonesini, Giorgia Callegaro and Luciano Campi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We frame dynamic persuasion in a partial observation stochastic control Leader-Follower game with an ergodic criterion. The Receiver controls the dynamics of a multidimensional unobserved state process. Information is provided to the Receiver through a device designed by the Sender that generates the observation process. The commitment of the Sender is enforced. We develop this approach in the case where all dynamics are linear and the preferences of the Receiver are linear-quadratic. We prove a verification theorem for the existence and uniqueness of the solution of the HJB equation satisfied by the Receiver's value function. An extension to the case of persuasion of a mean field of interacting Receivers is also provided. We illustrate this approach in two applications: the provision of information to electricity consumers with a smart meter designed by an electricity producer; the information provided by carbon footprint accounting rules to companies engaged in a best-in-class emissions reduction effort. In the first application, we link the benefits of information provision to the mispricing of electricity production. In the latter, we show that even in the absence of information cost, it might be optimal for the regulator to blur information available to firms to prevent them from coordinating on a higher level of carbon footprint to reduce their cost of reaching a below average emission target.

Keywords: persuasion; filtering; ergodic control; Stackelberg games; mean field games; smart meters; carbon footprint (search for similar items in EconPapers)
JEL-codes: C61 C73 D82 D83 Q51 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2025-07-31
New Economics Papers: this item is included in nep-gth and nep-mic
References: Add references at CitEc
Citations:

Published in Journal of Economic Dynamics and Control, 31, July, 2025, 176. ISSN: 0165-1889

Downloads: (external link)
http://eprints.lse.ac.uk/127889/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:127889

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().