Informed Information Design

Frederic Koessler and Vasiliki Skreta

PSE Working Papers from HAL

Abstract: A designer is privately informed about the state and chooses an information-disclosure mechanism to influence the decisions of multiple agents playing a game. We define interim-optimal mechanisms, a subset of incentive-compatible mechanisms that are optimal in the sense that the informed designer cannot credibly find an alternative mechanism that strictly improves his interim payoff. We prove that an interim-optimal mechanism exists and that every interim-optimal mechanism is a perfect Bayesian equilibrium outcome of the informed-designer game. An ex-ante optimal mechanism may not be interim optimal, but it is when it is ex-post optimal. Likewise, the unraveling outcome in disclosure games is interim optimal. We provide a belief-based characterization of interim-optimal mechanisms and compare them with ex-ante optimal ones in common economic environments. In settings with strategic complements and binary actions, every ex-ante optimal mechanism is interim optimal. We compare interim optimality to other solutions of informed-principal problems.

Keywords: Core mechanism; Bayesian persuasion; Interim information design; Neutral optimum; Informed principal; Strong-neologism proofness; Verifiable types (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03107866v3
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Informed Information Design (2023)
Working Paper: Informed Information Design (2022)
Working Paper: Informed Information Design (2022)
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