Verifiable disclosure

We develop a unified treatment of truthful disclosure (persuasion) games, providing a joint framework that nests, among other models, unraveling theory, costly disclosure, uncertainty about information endowment and multi-dimensional disclosure. We show the existence of (at most) a unique equilibrium that is reasonable given a commonly used signaling refinement, and provide a constructive proof of the equilibrium strategy and beliefs. We use the model to examine the following question: can the sender benefit from a regulation that commits to disclosing more precise information? We show that the sender is worse off if an unconditional reduction in discretion induces a more informative equilibrium. Conversely, mandating disclosure of unfavorable information may increase the sender’s ex ante payoff.