Optimal Dynamic Information Provision

Renault, Jérôme, Solan, Eilon and Vieille, Nicolas (2017) Optimal Dynamic Information Provision. Games and Economic Behavior, 104. pp. 329-349.

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Official URL: http://tse-fr.eu/pub/32105

Abstract

We study a dynamic model of information provision. A state of nature evolves according to a Markov chain. An advisor with commitment power decides how much information to provide to an uninformed decision maker, so as to influence his short-term decisions. We deal with a stylized class of situations, in which the decision maker has a risky action and a safe action, and the payoff to the advisor only depends on the action chosen by the decision maker. The greedy disclosure policy is the policy which, at each round, minimizes the amount of information being disclosed in that round, under the constraint that it maximizes the current payoff of the advisor. We prove that the greedy policy is optimal in many cases – but not always.

Item Type: Article
Language: English
Date: July 2017
Refereed: Yes
Uncontrolled Keywords: Dynamic information provision, optimal strategy, greedy algorithm, commitment
JEL codes: C72 - Noncooperative Games
C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 13 Apr 2018 09:07
Last Modified: 13 Apr 2018 09:07
OAI ID: oai:tse-fr.eu:32105
URI: http://publications.ut-capitole.fr/id/eprint/25709

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