arXiv subjects

Jeffrey Mensch

Publications and source records attributed to Jeffrey Mensch.

4 recordsLinked to original sources

arXiv2025

Posterior-Separable Costs and Menu Preferences

We consider an agent with a rationally inattentive preference over menus of acts, as in de Oliveira et al (2017). We show that two axioms, Independence of Irrelevant Alternatives and Ignorance Equivalence, are necessary and sufficient for this agent to have a posterior-separable cost satisfying a mild smoothness condition, called joint-directional differentiability. Viewing the decision-maker's problem as a Bayesian persuasion problem, we also show that these axioms are necessary and sufficient for solvability by a unique hyperplane. When the cost function remains invariant for different priors, we show that these axioms imply uniformly posterior separable costs that are differentiable.

econ.TH↗

arXiv2025

Revealed Bayesian Persuasion

How does one test empirically the hypothesis that a decision maker (DM) is being influenced by information via Bayesian persuasion? In this paper, I consider a DM whose state-dependent preferences are known to an analyst, who sees the conditional distribution of choices given the state. I provide necessary and sufficient conditions for the dataset to be consistent with the DM being Bayesian persuaded by an unobserved sender who generates a distribution of signals to ex-ante optimize the sender's expected payoff. I thereby provide a tool for empirical work on information design.

econ.TH↗

arXiv2023

Posterior-Mean Separable Costs of Information Acquisition

We analyze a problem of revealed preference given state-dependent stochastic choice data in which the payoff to a decision maker (DM) only depends on their beliefs about posterior means. Often, the DM must also learn about or pay attention to the state; in applied work on this subject, a convenient assumption is that the costs of such learning are linearly dependent in the distribution over posterior means. We provide testable conditions to identify whether this assumption holds. This allows for the use of information design techniques to solve the DM's problem.

econ.TH↗

arXiv2022

Monopoly, Product Quality, and Costly Information

A seller offers a buyer a schedule of transfers and associated product qualities. After observing this schedule, the buyer chooses a flexible costly signal about his type. We show it is without loss to focus on a class of allocations that compensate the buyer for his marginal learning costs. In the optimal menu, all types typically receive lower-than-efficient quality (including ``at the top''). Moreover, profits are non-monotonic in the level of information costs, and the consumer may be better off when such costs are low than when information is free. When learning costs are steep, the optimal menu contains at most two purchasing options.

econ.TH↗