Information Design in Games: Certification Approach

Alex Smolin and Takuro Yamashita

No 18282, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Several players participate in a game with a continuum of actions. A designer chooses an information structure - a joint distribution of a state and private signals - and evaluates it according to the expected designer's payoff in the induced Bayes Nash equilibrium. We show an information structure is designer-optimal whenever the equilibrium play it induces can also be induced in an auxiliary contracting problem. This finding gives rise to a tractable solution method, which we use to study two novel applications. In an investment game, an optimal structure fully informs a single investor while providing no information to others. This structure is robustly optimal, for any state distribution and number of investors. In a price competition game, an optimal structure is Gaussian and recommends prices linearly in the state. This structure is uniquely optimal.

Keywords: Bayesian; persuasion (search for similar items in EconPapers)
Date: 2023-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18282 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:18282

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18282

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().