How to Persuade a Long-Run Decision Maker

34 Pages Posted: 23 Dec 2015 Last revised: 30 Jan 2017

Jacopo Bizzotto

University of Oslo - Department of Economics

Jesper Rudiger

University of Copenhagen - Department of Economics

Adrien Vigier

University of Oxford - Department of Economics

Date Written: October 1, 2016

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, 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 also show that more precise exogenous news can improve the designer's welfare.

Keywords: Bayesian Persuasion, Dynamic Information Provision, Public News

JEL Classification: C72, C73, D83

Suggested Citation

Bizzotto, Jacopo and Rudiger, Jesper and Vigier, Adrien, How to Persuade a Long-Run Decision Maker (October 1, 2016). 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 Rudiger (Contact Author)

University of Copenhagen - Department of Economics ( email )

Ă˜ster 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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