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Markovian persuasion

Author

Listed:
  • Lehrer, Ehud

    (Department of Economics, Durham University, UK)

  • Shaiderman, Dimitry

    (Faculty of Data and Decision Sciences, Technion–Israel Institute of Technology)

Abstract

In the classical Bayesian persuasion model, an informed player and an uninformed one engage in a static interaction. This work extends this classical model to a dynamic setting where the state of nature evolves according to a Markovian law, allowing for a more realistic representation of real-world situations where the state of nature evolves over time. In this repeated persuasion model, an optimal disclosure strategy of the sender must balance between obtaining a high-stage payoff and disclosing information that may have negative implications on future payoffs. We discuss optimal strategies under different discount factors and characterize when the asymptotic value achieves the maximal possible value.

Suggested Citation

  • Lehrer, Ehud & Shaiderman, Dimitry, 0. "Markovian persuasion," Theoretical Economics, Econometric Society.
    • Handle: RePEc:the:publsh:5372
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    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • 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
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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