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Dynamic Information Provision: Rewarding the Past and Guiding the Future

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  • Ian Ball

Abstract

I study the optimal provision of information in a long-term relationship between a sender and a receiver. The sender observes a persistent, evolving state and commits to send signals over time to the receiver, who sequentially chooses public actions that affect the welfare of both players. I solve for the sender's optimal policy in closed form: the sender reports the value of the state with a delay that shrinks over time and eventually vanishes. Even when the receiver knows the current state, the sender retains leverage by threatening to conceal the future evolution of the state.

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  • Ian Ball, 2023. "Dynamic Information Provision: Rewarding the Past and Guiding the Future," Papers 2303.09675, arXiv.org.
    • Handle: RePEc:arx:papers:2303.09675
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    File URL: http://arxiv.org/pdf/2303.09675
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