Working Paper: CEPR ID: DP16543
Authors: Laura Doval; Alex Smolin
Abstract: We study the payoffs that can arise under some information structure from an interim perspective. There is a set of types distributed according to some prior distribution and a payoff function that assigns a value to each pair of a type and a belief over the types. Any information structure induces an interim payoff profile which describes, for each type, the expected payoff under the information structure conditional on the type. We characterize the set of all interim payoff profiles consistent with some information structure. We illustrate our results through applications.
Keywords: Bayesian persuasion; Information design; Interim payoffs; Reputation
JEL Codes: D82; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| set of interim payoff profiles (ipset) (G35) | characterized as the convex hull of a vector-valued function (C61) |
| boundary points of the ipset (F55) | correspond to optimal solutions in Bayesian persuasion problems (C73) |
| choice of information structure (D80) | influences interim payoffs achievable by different types (J33) |
| likelihood ratios and adjusted payoff functions (C52) | determine expected payoffs under given information structures (D80) |
| participation constraints (D10) | alter optimal information structures (D82) |
| optimal information structures (D82) | lead to different interim payoffs for the types involved (C78) |