Bayesian Persuasion and Information Design
Байесианское убеждение и дизайн информации
2019-05-13
SCID: 54.1/u42hyakm
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Bayesian persuasioncoarse gradinginformation designnoisy signaling of traffic statepartial disclosure of bank solvency
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Abstract (AI)
A school may improve its students’ job outcomes if it issues only coarse grades. Google can reduce congestion on roads by giving drivers noisy information about the state of traffic. A social planner might raise everyone's welfare by providing only partial information about solvency of banks. All of this can happen even when everyone is fully rational and understands the data-generating process. Each of these examples raises questions of what is the (socially or privately) optimal information that should be revealed. In this article, I review the literature that answers such questions.
Key Findings
1
Applications include issuing coarse grades, providing noisy traffic information, and restricting bank solvency information, showing diverse domains where information design matters.
2
Coarse or partial information disclosure can improve outcomes (e.g., student job outcomes, traffic congestion, social welfare) even when agents are fully rational and understand the data-generating process.
3
Optimal information provision can be socially or privately determined and may involve withholding or adding noise to information to achieve better aggregate outcomes.
4
The literature surveyed characterizes what information should be revealed to optimize objectives across different settings.
Research Object
Information structure / signals revealed to decision makers (coarse or noisy grades, traffic signals, partial solvency information)
Research Subject
Optimal design and strategic effects of information disclosure (Bayesian persuasion) on agents' actions and social/private welfare
Publication Details
Publication Date
2019-05-13
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