Persuasion through information cost design

This study examines information transmission using an indirect approach wherein designers shape a decision maker’s (DM) knowledge by strategically making information difficult to process. We compare the indirect approach with the direct approach à la Bayesian persuasion. In single-designer settings, posterior-separable costs replicate the designer’s first-best persuasion outcome. However, in multi-designer settings where the decision maker can use only one source, information cost design fails to replicate the persuasion outcomes and induces full information. In contrast, when the DM can acquire information sequentially from multiple designers, information cost design replicates the affine-independent persuasion outcomes. Our findings demonstrate how competing sources and forms of information processing can influence DM’s action when information gatekeepers loosen control over information acquisition.