A Theory of Multidimensional Information Disclosure
AbstractWe study disclosure of information about the multidimensional state of the world when uninformed receivers' actions affect the sender's utility. Given a disclosure rule, the receivers form an expectation about the state following each message. Under the assumption that the senderfs expected utility is written as the expected value of a quadratic function of those conditional expectations, we identify conditions under which full and no disclosure is optimal for the sender and show that a linear transformation of the state is optimal if it is normally distributed. We apply our theory to advertising, political campaigning, and monetary policy.
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Bibliographic InfoPaper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0828.
Date of creation: Jan 2012
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-01 (All new papers)
- NEP-CTA-2012-02-01 (Contract Theory & Applications)
- NEP-MIC-2012-02-01 (Microeconomics)
- NEP-UPT-2012-02-01 (Utility Models & Prospect Theory)
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