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arXiv · 2303.09675

Dynamic Information Provision: Rewarding the Past and Guiding the Future

Ian Ball
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Abstract

I study the optimal provision of information in a long-term relationship between a sender and a receiver. The sender observes a persistent, evolving state and commits to send signals over time to the receiver, who sequentially chooses public actions that affect the welfare of both players. I solve for the sender's optimal policy in closed form: the sender reports the value of the state with a delay that shrinks over time and eventually vanishes. Even when the receiver knows the current state, the sender retains leverage by threatening to conceal the future evolution of the state.

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econ.TH

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Ian Ball. 2023-03-16. Dynamic Information Provision: Rewarding the Past and Guiding the Future. https://arxiv.org/abs/2303.09675

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