Coarse Information Design

Qianjun Lyu (), Wing Suen and Yimeng Zhang ()
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Qianjun Lyu: University of Bonn
Yimeng Zhang: University of Hong Kong

No 314, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We study an information design problem with continuous state and discrete signal space. Under convex value functions, the optimal information structure is interval-partitional and exhibits a dual expectations property: each induced signal is the conditional mean (taken under the prior density) of each interval; and each interval cutoff is the conditional mean (taken under the value function curvature) of the interval formed by neighboring signals. This property enables an examination into which part of the state space is more finely partitioned. The analysis can be extended to general value functions and adapted to study coarse mechanism design.

Keywords: Dual expectations; scrutiny; Coarse mechanism design (search for similar items in EconPapers)
JEL-codes: D81 D82 D83 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2024-06
New Economics Papers: this item is included in nep-des and nep-mic
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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_314_2024.pdf First version, 2024 (application/pdf)

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Working Paper: Coarse Information Design (2024)
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