Constrained Persuasion with Private Information

Kosenko Andrew ()
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Kosenko Andrew: Department of Economics, Accounting, and Finance, School of Management, Marist College, Poughkeepsie, USA

The B.E. Journal of Theoretical Economics, 2023, vol. 23, issue 1, 345-370

Abstract: I study a model of strategic communication between a privately informed sender who can persuade a receiver using Blackwell experiments. Hedlund (2017). “Bayesian Persuasion by a Privately Informed Sender.” Journal of Economic Theory 167 (January): 229–68, shows that private information in such a setting results in extremely informative equilibria. I make three points: first, the informativeness of equilibria relies crucially on two features – the mere availability of a fully revealing experiment, and a compact action space for the receiver. I show by examples that absent these features, equilibria may be uninformative. Secondly, I characterize equilibria in a simple model with constraints for the sender (only two experiments available, none are fully revealing) and the receiver (discrete action space). I argue that noisy experiments and discrete actions are the norm rather than the exception (and therefore, private information need not result in information revelation). Thirdly, I define a novel refinement that selects the most informative equilibria in most cases.

Keywords: persuasion; communication; information provision; signaling; information transmission; information design (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/bejte-2021-0017

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