How to Persuade a Long-Run Decision Maker

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