Global manipulation by local obfuscation

Fei Li, Yangbo Song and Mofei Zhao

Journal of Economic Theory, 2023, vol. 207, issue C

Abstract: We study adversarial information design in a regime-change context. A continuum of agents simultaneously chooses whether to attack the current regime. The attack succeeds if and only if the mass of attackers outweighs the regime's strength. A designer manipulates information about the regime's strength to maintain the status quo. Our optimal information structure exhibits local obfuscation: some agents receive a signal matching the regime's true strength, and others receive an elevated signal professing slightly higher strength. This policy is the unique limit of finite-signal problems. Public signals are strictly suboptimal, and in some cases where public signals become futile, local obfuscation guarantees the collapse of agents' coordination, making the designer's information disclosure time consistent and relieving the usual commitment concern.

Keywords: Coordination; Information design; Regime-change game (search for similar items in EconPapers)
JEL-codes: C7 D7 D8 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:207:y:2023:i:c:s002205312200165x

DOI: 10.1016/j.jet.2022.105575

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