Information design in concave games

Takuro Yamashita and Alexey Smolin
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Alexey Smolin: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: We study information design in games with a continuum of actions such that the payoff of each player is concave in his action. A designer chooses an information structure--a joint distribution of a state and a private signal of each player. The information structure induces a Bayesian game and is evaluated according to the expected designer's payoff under the equilibrium play. We develop a method that allows to find an optimal information structure, one that cannot be outperformed by any other information structure, however complex. To do so, we exploit the property that each player's incentive is summarized by his marginal payoff. We show that an information structure is optimal whenever the induced strategies can be implemented by an incentive contract in a principal-agent problem that incorporates the players' marginal payoffs. We use this result to establish the optimality of Gaussian information structures in the settings with quadratic payoffs and a multivariate normally-distributed state. We analyze the details of optimal structures in a differentiated Bertrand competition and in a prediction game.

Keywords: Bayesian persuasion; Concave games; First-order approach; Gaussian information structures; Information design; Selective informing; Weak duality (search for similar items in EconPapers)
Date: 2022-07
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Published in EC'22: Proceedings of the 23rd ACM Conference on Economics and Computation., Association for Computing Machinery., pp.870, 2022, 978-1-4503-9150-4. ⟨10.1145/3490486.3538303⟩

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Related works:
Working Paper: Information Design in Concave Games (2022)
Working Paper: Information Design in Concave Games (2022)
Working Paper: Information Design in Concave Games (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04141179

DOI: 10.1145/3490486.3538303

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