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Markovian Persuasion with Two States

Author

Listed:
  • Galit Ashkenazi-Golan
  • Pen'elope Hern'andez
  • Zvika Neeman
  • Eilon Solan

Abstract

This paper addresses the question of how to best communicate information over time in order to influence an agent's belief and induced actions in a model with a binary state of the world that evolves according to a Markov process, and with a finite number of actions. We characterize the sender's optimal message strategy in the limit, as the length of each period decreases to zero. The optimal strategy is not myopic. Depending on the agent's beliefs, sometimes no information is revealed, and sometimes the agent's belief is split into two well-chosen posterior beliefs.

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  • Galit Ashkenazi-Golan & Pen'elope Hern'andez & Zvika Neeman & Eilon Solan, 2022. "Markovian Persuasion with Two States," Papers 2209.06536, arXiv.org.
    • Handle: RePEc:arx:papers:2209.06536
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    References listed on IDEAS

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    1. Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476, December.
    2. Jérôme Renault, 2006. "The Value of Markov Chain Games with Lack of Information on One Side," Mathematics of Operations Research, INFORMS, vol. 31(3), pages 490-512, August.
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