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How to Persuade a Long-Run Decision Maker

35 Pages Posted: 23 Dec 2015 Last revised: 17 Aug 2017

Jacopo Bizzotto

University of Oslo - Department of Economics

Jesper Rüdiger

University of Copenhagen - Department of Economics

Adrien Vigier

University of Oxford - Department of Economics

Date Written: April 24, 2017

Abstract

We examine the Bayesian persuasion of a long-run decision maker by a long-run information designer. Each period until a deadline is reached the decision maker can approve the designer's proposal, reject it, or wait for more information, which may come both from the designer and from exogenous news. Efficiency requires the decision maker never to wait. We present the conditions under which the (unique) equilibrium is efficient. We show that, surprisingly, increasing exogenous information can improve the designer's welfare.

Keywords: Information Design, Bayesian Persuasion, Dynamic Information Provision

JEL Classification: C72, C73, D83

Suggested Citation

Bizzotto, Jacopo and Rüdiger, Jesper and Vigier, Adrien, How to Persuade a Long-Run Decision Maker (April 24, 2017). Available at SSRN: https://ssrn.com/abstract=2706683 or http://dx.doi.org/10.2139/ssrn.2706683

Jacopo Bizzotto

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

Jesper Rüdiger (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Adrien Vigier

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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