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Informed Information Design

Author

Listed:
  • Koessler, Frédéric
  • Skreta, Vasiliki
Abstract
A designer is privately informed about the state and chooses an information- disclosure mechanism to influence the decisions of multiple agents playing a game. We define interim-optimal mechanisms, a subset of incentive-compatible mechan- isms that are optimal in the sense that the informed designer cannot credibly find an alternative mechanism that strictly improves his interim payoff. We prove that an interim-optimal mechanism exists and that every interim-optimal mechanism is a perfect Bayesian equilibrium outcome of the informed-designer game. An ex- ante optimal mechanism may not be interim optimal, but it is when it is ex-post optimal. Likewise, the unraveling outcome in disclosure games is interim op- timal. We provide a belief-based characterization of interim-optimal mechanisms and compare them with ex-ante optimal ones in common economic environments. In settings with strategic complements and binary actions, every ex-ante optimal mechanism is interim optimal. We compare interim optimality to other solutions of informed-principal problems.

Suggested Citation

  • Koessler, Frédéric & Skreta, Vasiliki, 2022. "Informed Information Design," CEPR Discussion Papers 17028, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17028
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    References listed on IDEAS

    as
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    Citations

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    as


    Cited by:

    1. Bara Kim & Seung Han Yoo, 2022. "Grand Mechanism and Population Uncertainty," Discussion Paper Series 2204, Institute of Economic Research, Korea University.
    2. Emir Kamenica & Xiao Lin, 2024. "Commitment and Randomization in Communication," PIER Working Paper Archive 24-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    3. Laura Doval & Alex Smolin, 2024. "Persuasion and Welfare," Journal of Political Economy, University of Chicago Press, vol. 132(7), pages 2451-2487.
    4. Bonatti, Alessandro & Dahleh, Munther & Horel, Thibaut & Nouripour, Amir, 2024. "Selling information in competitive environments," Journal of Economic Theory, Elsevier, vol. 216(C).
    5. Smolin, Alex & Doval, Laura, 2021. "Information Payoffs: An Interim Perspective," TSE Working Papers 21-1247, Toulouse School of Economics (TSE).
    6. Emir Kamenica & Kyungmin Kim & Andriy Zapechelnyuk, 2021. "Bayesian persuasion and information design: perspectives and open issues," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 701-704, October.

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    More about this item

    Keywords

    Interim information design; Bayesian persuasion; Informed prin- cipal; Disclosure games; Unraveling; Neutral optimum; Strong neologism proof- ness; Core mechanism; Verifiable types;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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