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Dynamic Persuasion with Outside Information

Author

Listed:
  • Jacopo Bizzotto
  • Jesper Rüdiger
  • Adrien Vigier

Abstract

A principal seeks to persuade an agent to accept an offer of uncertain value before a deadline expires. The principal can generate information, but exerts no control over exogenous outside information. The combined effect of the deadline and outside information creates incentives for the principal to keep uncertainty high in the first periods so as to persuade the agent close to the deadline. We characterize the equilibrium, compare it to the single-player decision problem in which exogenous outside information is the agent's only source of information, and examine the welfare implications of our analysis.

Suggested Citation

  • Jacopo Bizzotto & Jesper Rüdiger & Adrien Vigier, 2021. "Dynamic Persuasion with Outside Information," American Economic Journal: Microeconomics, American Economic Association, vol. 13(1), pages 179-194, February.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:1:p:179-94
    DOI: 10.1257/mic.20180141
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    Citations

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    Cited by:

    1. Chang Liu, 2021. "Motivating Effort with Information about Future Rewards," Papers 2110.05643, arXiv.org, revised Oct 2023.
    2. Escudé, Matteo & Sinander, Ludvig, 2023. "Slow persuasion," Theoretical Economics, Econometric Society, vol. 18(1), January.
    3. Matysková, Ludmila & Montes, Alfonso, 2023. "Bayesian persuasion with costly information acquisition," Journal of Economic Theory, Elsevier, vol. 211(C).
    4. Kaya, Ayça, 2023. "Paying with information," Theoretical Economics, Econometric Society, vol. 18(2), May.
    5. Parakhonyak, Alexei & Vikander, Nick, 2023. "Information design through scarcity and social learning," Journal of Economic Theory, Elsevier, vol. 207(C).

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • 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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