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Journal of Political Economy
Article . 2023 . Peer-reviewed
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Informed Information Design

Authors: Koessler, Frédéric; Skreta, Vasiliki;

Informed Information Design

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 mechanisms 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 optimal. 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.

Countries
United Kingdom, France
Keywords

neutral optimum, unraveling, D.D8.D82 - Asymmetric and Private Information • Mechanism Design, Informed principal, interim information design, Interim information design, informed principal, Verifiable types, Bayesian persuasion, verifiable types, Neutral optimum, Strong-neologism proofness, Bayes-correlated equilibrium, Core mechanism, C.C7.C72 - Noncooperative Games, [SHS] Humanities and Social Sciences, disclosure games, [SHS.ECO] Humanities and Social Sciences/Economics and Finance

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    popularity
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    Top 10%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
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    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
15
Top 10%
Top 10%
Top 10%
Green