Disclosure Games with Large Evidence Spaces

Shaofei Jiang

Papers from arXiv.org

Abstract: We study a disclosure game with a large evidence space. There is an unknown binary state. A sender observes a sequence of binary signals about the state and discloses a left truncation of the sequence to a receiver in order to convince him that the state is good. We focus on truth-leaning equilibria (cf. Hart et al. (2017)), where the sender discloses truthfully when doing so is optimal, and the receiver takes off-path disclosure at face value. In equilibrium, seemingly sub-optimal truncations are disclosed, and the disclosure contains the longest truncation that yields the maximal difference between the number of good and bad signals. We also study a general framework of disclosure games which is compatible with large evidence spaces, a wide range of disclosure technologies, and finitely many states. We characterize the unique equilibrium value function of the sender and propose a method to construct equilibria for a broad class of games.

Date: 2019-10, Revised 2020-12
New Economics Papers: this item is included in nep-gth and nep-mic
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