Type-contingent Information Disclosure

Takuro Yamashita and Shuguang Zhu

No 21-1242, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We study a mechanism design problem where the principal can also manipulate the agent’s information about a payoff-relevant state. Jointly designing information and allocation rule is proved equivalent to certain multi-dimensional screening problem. Based on this equivalence, when the agent’s types are positively-related, full disclosure is proved optimal under regularity conditions; while with negatively-related types, the optimal disclosure policy takes the form of a bad-state alert, which is in general a type-contingent disclosure policy. In a binary environment, we fully charac- terize the optimal mechanisms and discuss when type-contingent disclosure strictly benefits the principal and its welfare consequences.

Keywords: Information design; Bayesian persuasion; Mechanism design (search for similar items in EconPapers)
JEL-codes: C72 D82 D86 (search for similar items in EconPapers)
Date: 2021-08-30
New Economics Papers: this item is included in nep-des and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:125878

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