Persuading while Learning

Itai Arieli, Yakov Babichenko, Dima Shaiderman and Xianwen Shi

Working Papers from University of Toronto, Department of Economics

Abstract: We propose a dynamic persuasion model of product adoption, where an impatient, long-lived sender commits to a dynamic disclosure policy to persuade a sequence of short-lived receivers to adopt a new product. The sender privately observes a sequence of signals, one per period, about the product quality, and therefore the sequence of her posteriors forms a discrete-time martingale. The disclosure policy specifies ex ante how the sender's information will be revealed to the receivers in each period. We introduce a new concept called ``Blackwell-preserving kernels'' and show that if the sender's belief martingale possesses these kernels, the family of optimal strategies for the sender takes an interval form; namely, in every period, the set of martingale realizations in which adoption occurs is an interval. Utilizing this, we prove that if the sender is sufficiently impatient, then under a random walk martingale, the optimal policy is fully transparent up to the moment of adoption; namely, the sender reveals all the information she privately holds in every period.

Keywords: Dynamic Information Design; Bayesian Persuasion; Learning (search for similar items in EconPapers)
JEL-codes: D82 D83 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2025-01-16
New Economics Papers: this item is included in nep-des, nep-gth, nep-inv and nep-mic
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