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Constrained Persuasion with Private Information

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  • Kosenko Andrew

    (Department of Economics, Accounting, and Finance, School of Management, Marist College, Poughkeepsie, USA)

Abstract

I study a model of strategic communication between a privately informed sender who can persuade a receiver using Blackwell experiments. Hedlund (2017). “Bayesian Persuasion by a Privately Informed Sender.” Journal of Economic Theory 167 (January): 229–68, shows that private information in such a setting results in extremely informative equilibria. I make three points: first, the informativeness of equilibria relies crucially on two features – the mere availability of a fully revealing experiment, and a compact action space for the receiver. I show by examples that absent these features, equilibria may be uninformative. Secondly, I characterize equilibria in a simple model with constraints for the sender (only two experiments available, none are fully revealing) and the receiver (discrete action space). I argue that noisy experiments and discrete actions are the norm rather than the exception (and therefore, private information need not result in information revelation). Thirdly, I define a novel refinement that selects the most informative equilibria in most cases.

Suggested Citation

  • Kosenko Andrew, 2023. "Constrained Persuasion with Private Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 23(1), pages 345-370, January.
    • Handle: RePEc:bpj:bejtec:v:23:y:2023:i:1:p:345-370:n:7
    DOI: 10.1515/bejte-2021-0017
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    More about this item

    Keywords

    persuasion; communication; information provision; signaling; information transmission; information design;
    All these keywords.

    JEL classification:

    • 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
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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