Optimal attention management: a tractable framework

DOI10.1016/J.GEB.2022.01.029MaRDI QIDQ2673218zbMATH OpenOpenAlexFDO

Authors Elliot Lipnowski, Laurent Mathevet, Dong Wei

Publication date 9 June 2022

Published in Games and Economic Behavior (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/2006.07729

zbMATH Keywords

costly information processinginformation disclosurepaternalistic information designrational inattention

Mathematics Subject Classification ID

Principal-agent models (91B43) Economics of information (91B44)

Abstract: A well-intentioned principal provides information to a rationally inattentive agent without internalizing the agent's cost of processing information. Whatever information the principal makes available, the agent may choose to ignore some. We study optimal information provision in a tractable model with quadratic payoffs where full disclosure is not optimal. We characterize incentive-compatible information policies, that is, those to which the agent willingly pays full attention. In a leading example with three states, optimal disclosure involves information distortion at intermediate costs of attention. As the cost increases, optimal information abruptly changes from downplaying the state to exaggerating the state.

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Cites work

• Bayesian persuasion with multiple senders and rich signal spaces
• Persuasion under costly learning
• The Economics of Clear Advice and Extreme Options

Cited in

(7)

• Foundations for optimal inattention
• Optimal dynamic information provision
• Attentional role of quota implementation
• Rational inattention and public signals
• Bayesian persuasion with costly information acquisition
• Existence of equilibria in persuasion games with costly information acquisition
• Optimal ownership of entrepreneurial firms with rational inattention

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