Persuasion and Matching: Optimal Productive Transport

Anton Kolotilin, Roberto Corrao () and Alexander Wolitzky
Additional contact information
Roberto Corrao: Department of Economics, MIT

No 2023-12, Discussion Papers from School of Economics, The University of New South Wales

Abstract: We consider general Bayesian persuasion problems where the receiver’s utility is single-peaked in a one-dimensional action. We show that a signal that pools at most two states in each realization is always optimal, and that such pairwise signals are the only solutions under a non-singularity condition (the twist condition). Our core results provide conditions under which riskier prospects induce higher or lower actions, so that the induced action is single-dipped or single-peaked on each set of nested prospects. We also provide conditions for the optimality of either full disclosure or negative assortative disclosure, where all prospects are nested. Methodologically, our results rely on novel duality and complementary slackness theorems. Our analysis extends to a general problem of assigning one-dimensional inputs to productive units, which we call optimal productive transport. This problem covers additional applications including club economies (assigning workers to firms, or students to schools), robust option pricing (assigning future asset prices to price distributions), and partisan gerrymandering (assigning voters to districts).

Keywords: Bayesian persuasion; information design; first-order approach; optimal transport; duality; complementary slackness; pairwise signal; single-dipped signal; negative assortative disclosure; club economies; option pricing; gerrymandering (search for similar items in EconPapers)
JEL-codes: C78 D82 D83 (search for similar items in EconPapers)
Pages: 81 pages
Date: 2023-10
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://research.economics.unsw.edu.au/RePEc/papers/2023-12.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Unavailable: Back-end server is at capacity

Related works:
Working Paper: Persuasion and Matching: Optimal Productive Transport (2023)
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:swe:wpaper:2023-12

Access Statistics for this paper

More papers in Discussion Papers from School of Economics, The University of New South Wales Contact information at EDIRC.
Bibliographic data for series maintained by Hongyi Li ().