Working Paper: CEPR ID: DP16959
Authors: Ina Taneva; Laurent Mathevet
Abstract: We formalize the concepts of horizontal and vertical information transmission andintroduce two families of information structures, namely single-meeting schemes anddelegated hierarchies, that specialize along these dimensions. We characterize thestrategic outcomes that they implement in general finite incomplete information gamesand illustrate the resulting linear programming approach in a linear network example.We build on the characterizations to show that these families are unconstraine-doptimalin binary-action games with strategic complementarities. Finally, we generalizethese families to multiple meetings and random hierarchies and characterize thecorresponding strategic outcomes.
Keywords: incomplete information; delegated transmission; Bayes correlated equilibrium; information design
JEL Codes: C72; D82; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| single-meeting schemes (C78) | distribution p_bce (D39) |
| information constraints of single-meeting schemes (C78) | strategic constraints (L21) |
| single-meeting schemes (C78) | optimal degree of shared information (D83) |
| optimal degree of shared information (D83) | coordination among agents (D70) |
| delegated hierarchies (D73) | optimal under supermodular utility (D11) |
| supermodular utility in action profiles and states (C71) | efficient information transmission (L96) |