Informational Puts

Andrew Koh, Sivakorn Sanguanmoo and Kei Uzui

Papers from arXiv.org

Abstract: We analyze how dynamic information should be provided to uniquely implement the largest equilibrium in binary-action coordination games. The designer offers an informational put: she stays silent if players choose her preferred action, but injects asymmetric and inconclusive public information if they lose faith. There is (i) no multiplicity gap: the largest (partially) implementable equilibrium can be implemented uniquely; and (ii) no commitment gap: the policy is sequentially optimal. Our results have sharp implications for the design of policy in coordination environments.

Date: 2024-11, Revised 2024-12
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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