Dynamic Persuasion with Outside Information

Bizzotto, Jacopo; R�diger, Jesper; Vigier, Adrien

Abstract

A principal seeks to persuade an agent to accept an offer of uncertain value before a deadline expires. The principal can generate information, but exerts no control over exogenous outside information. The combined effect of the deadline and outside information creates incentives for the principal to keep uncertainty high in the first periods so as to persuade the agent close to the deadline. We characterize the equilibrium, compare it to the single-player decision problem in which exogenous outside information is the agent's only source of information, and examine the welfare implications of our analysis.

Citation

Bizzotto, J., Rüdiger, J., & Vigier, A. (2021). Dynamic Persuasion with Outside Information. American Economic Journal: Microeconomics, 13(1), 179-194. https://doi.org/10.1257/mic.20180141

• Journal Article Type: Article
• Acceptance Date: May 1, 2020
• Publication Date: 2021-02
• Deposit Date: Sep 23, 2020
• Publicly Available Date: Sep 23, 2020
• Journal: American Economic Journal: Microeconomics
• Print ISSN: 1945-7669
• Electronic ISSN: 1945-7685
• Publisher: American Economic Association
• Peer Reviewed: Peer Reviewed
• Volume: 13
• Issue: 1
• Pages: 179-194
• DOI: https://doi.org/10.1257/mic.20180141
• Keywords: Information Design; Bayesian Persuasion; Dynamic Games
• Public URL: https://nottingham-repository.worktribe.com/output/4921107
• Publisher URL: https://www.aeaweb.org/articles?id=10.1257/mic.20180141&&from=f