Constrained Information Design

DOI10.1287/MOOR.2022.1346MaRDI QIDQ6149390zbMATH OpenOpenAlexFDO

Authors Laura Doval, Vasiliki Skreta

Publication date 5 March 2024

Published in Mathematics of Operations Research (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1811.03588

zbMATH Keywords

Bayesian persuasionconstrained optimizationinformation design

Mathematics Subject Classification ID

Mechanism design theory (91B03) Principal-agent models (91B43)

Abstract: We provide tools to analyze information design problems subject to constraints. We do so by extending the insight in Le Treust and Tomala (2019) to the case of multiple inequality and equality constraints. Namely, that an information design problem subject to constraints can be represented as an unconstrained information design problem with a additional states, one for each constraint. Thus, without loss of generality, optimal solutions induce as many posteriors as the number of states and constraints. We provide results that refine this upper bound. Furthermore, we provide conditions under which there is no duality gap in constrained information design, thus validating a Lagrangian approach. We illustrate our results with applications to mechanism design with limited commitment (Doval and Skreta, 2022a) and persuasion of a privately informed receiver (Kolotilin et al., 2017).

Recommendations

• Optimal disclosure of information to privately informed agents
• On the equivalence of information design by uninformed and informed principals
• Designing contracts and information jointly
• Persuasion and incentives through the lens of duality
• On the benefits of being constrained when receiving signals

Cited in

(4)

• The persuasion duality
• Advisors with hidden motives
• Signaling through Bayesian persuasion
• Bregman proximal gradient method for linear optimization under entropic constraints

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