Bayesian Persuasion and Information Design

Emir Kamenica

Chapter 9 in Bayesian Persuasion, 2025, pp 233-273 from World Scientific Publishing Co. Pte. Ltd.

Abstract: A school may improve its students’ job outcomes if it issues only coarse grades. Google can reduce congestion on roads by giving drivers noisy information about the state of traffic. A social planner might raise everyone’s welfare by providing only partial information about solvency of banks. All of this can happen even when everyone is fully rational and understands the data-generating process. Each of these examples raises questions of what is the (socially or privately) optimal information that should be revealed. In this article, I review the literature that answers such questions.

Keywords: Bayesian Persuasion; Economic Theory; Information Economics; Information Design; Disclosure; Game Theory; Strategic Communication; Disclosure Regulation; Persuasion Games; Political Economy; Economic Behavior; Information Revelation; Collusion; Competition; Congestion; Manipulation of Beliefs; Rating Systems; Optimization (search for similar items in EconPapers)
JEL-codes: C01 C72 D82 D83 (search for similar items in EconPapers)
Date: 2025
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