Working Paper: NBER ID: w29846
Authors: Richard T. Holden; Anup Malani; Chris Teh
Abstract: Sender conveys scarce information to a number of receivers to maximize the sum of receiver payoffs. Each receiver’s payoff depends on the state of the world and an action she takes. The optimal action is state contingent. Under mild regularity conditions, we show that the payoff of each receiver is convex in the amount of information she receives. Thus, it is optimal for Sender to target information to a single receiver. We then study four extensions in which interior information allocations are optimal.
Keywords: information allocation; receiver payoffs; scarcity; public policy
JEL Codes: D60; D61; D80; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| allocation of information (D83) | payoffs of receivers (G35) |
| information quality (L15) | payoffs of receivers (G35) |
| allocation of information (D83) | actions of receivers (G34) |
| convexity of payoffs in information (D80) | optimal allocation of information (D83) |
| sender's concern for equality (D63) | allocation of information (D83) |
| strategic interactions among receivers (C78) | optimal targeting of information (D83) |