2023/03/16 by Ian Ball, Ball, Ian · 2 citations
Decision Sciences · Social Sciences · Economics, Econometrics and Finance · #Game Theory and Applications #Media Influence and Politics #Economic Policies and Impacts
paper · pdf · doi:10.48550/arxiv.2303.09675
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.