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Bayesian Persuasion With Costly Information Acquisition

Author

Listed:
  • Ludmila Matysková
  • Alfonso Montes

Abstract

A sender choosing a signal to be disclosed to a receiver can often in fluence the receiver's actions. Is persuasion harder when the receiver has additional information sources? Does the receiver benefit from having them? We extend Bayesian persuasion to a receiver's acquisition of costly information. The game can be solved as a standard Bayesian persuasion under an additional constraint - the receiver never learns. The `threat' of learning hurts the sender. However, the outcome can also be worse for the receiver, in which case the receiver's possibility to gather additional information decreases social welfare. Furthermore, we propose a new solution method that does not rely directly on concavification, which is also applicable to standard Bayesian persuasion.

Suggested Citation

  • Ludmila Matysková & Alfonso Montes, 2021. "Bayesian Persuasion With Costly Information Acquisition," CRC TR 224 Discussion Paper Series crctr224_2021_296, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2021_296
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp296
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    Citations

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    Cited by:

    1. Koessler, Frederic & Laclau, Marie & Renault, Jérôme & Tomala, Tristan, 2022. "Long information design," Theoretical Economics, Econometric Society, vol. 17(2), May.
    2. Frédéric Koessler & Marie Laclau & Jerôme Renault & Tristan Tomala, 2022. "Long information design," Post-Print hal-03700394, HAL.
    3. Monte, Daniel & Linhares, Luis Henrique, 2023. "Stealth Startups, Clauses, and Add-ons: A Model of Strategic Obfuscation," MPRA Paper 115926, University Library of Munich, Germany.
    4. Matveenko, Andrei & Starkov, Egor, 2023. "Sparking curiosity or tipping the scales? Targeted advertising with consumer learning," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 172-192.
    5. Frédéric Koessler & Marie Laclau & Jerôme Renault & Tristan Tomala, 2022. "Long information design," PSE-Ecole d'économie de Paris (Postprint) hal-03700394, HAL.
    6. Takashi Ui, 2022. "Optimal and Robust Disclosure of Public Information," Papers 2203.16809, arXiv.org, revised Apr 2022.
    7. Takashi Ui, 2022. "Optimal and Robust Disclosure of Public Information," Working Papers on Central Bank Communication 039, University of Tokyo, Graduate School of Economics.
    8. Oleg Muratov, 2023. "Entrepreneur–Investor Information Design," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1431-1467, November.
    9. Takashi Ui, 2022. "Impacts of Public Information on Flexible Information Acquisition," Papers 2204.09250, arXiv.org, revised Apr 2022.
    10. Piotr Dworczak & Alessandro Pavan, 2022. "Preparing for the Worst but Hoping for the Best: Robust (Bayesian) Persuasion," Econometrica, Econometric Society, vol. 90(5), pages 2017-2051, September.
    11. Redlicki, Bartosz & Redlicki, Jakub, 2022. "Communication with Costly and Detectable Falsification," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 452-470.

    More about this item

    Keywords

    Bayesian persuasion; Rational inattention; Costly information acquisition; Information design;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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