CeDEx workshop - Andriy Zapechelnyuk (University of Glasgow)

Persuasion by an information monopolist

Abstract:

We investigate Bayesian persuasion by an information monopolist (firm, government) facing a heterogeneous audience. We establish conditions for equivalence of targeted and public persuasion. We also demonstrate that heterogeneity of the audience often forces the monopolist to either fully disclose or full censor information. We show that the monopolist leaves the highest information rents to the members of the audience whose preferences are more aligned with those of the monopolist. From the methodological perspective, the paper solves a mechanism design problem in which the screening tool is information provided to the agents and shows that the problem can be made isomorphic to that of optimal delegation.