Markovian Persuasion with Two States

Galit Ashkenazi-Golan, Pen\'elope Hern\'andez, Zvika Neeman and Eilon Solan

Papers from arXiv.org

Abstract: This paper addresses the question of how to best communicate information over time in order to influence an agent's belief and induced actions in a model with a binary state of the world that evolves according to a Markov process, and with a finite number of actions. We characterize the sender's optimal message strategy in the limit, as the length of each period decreases to zero. The optimal strategy is not myopic. Depending on the agent's beliefs, sometimes no information is revealed, and sometimes the agent's belief is split into two well-chosen posterior beliefs.

Date: 2022-09
New Economics Papers: this item is included in nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2209.06536

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