Dynamic Persuasion With Outside Information

46 Pages Posted: 26 Apr 2018 Last revised: 20 Feb 2020

See all articles by Jacopo Bizzotto

Jacopo Bizzotto

Oslo Business School - OsloMet

Jesper Rüdiger

Universidad Carlos III de Madrid - Department of Business Administration

Adrien Vigier

University of Oxford - Department of Economics

Date Written: February 20, 2020

Abstract

A principal seeks to persuade an agent to accept an offer of uncertain value before a deadline expires. The principal can generate information, but exerts no control over exogenous outside information. The combined effect of the deadline and outside information creates incentives for the principal to keep uncertainty high in the first periods so as to persuade the agent close to the deadline. We characterize the equilibrium, compare it to the single-player decision problem in which exogenous outside information is the agent's only source of information, and examine the welfare implications of our analysis.

Keywords: Information Design, Bayesian Persuasion, Dynamic Games

JEL Classification: C72, C73, D83

Suggested Citation

Bizzotto, Jacopo and Rüdiger, Jesper and Vigier, Adrien, Dynamic Persuasion With Outside Information (February 20, 2020). Available at SSRN: https://ssrn.com/abstract=3154313 or http://dx.doi.org/10.2139/ssrn.3154313

Jacopo Bizzotto (Contact Author)

Oslo Business School - OsloMet ( email )

Pilestredet 35
Oslo, 0166
Norway

Jesper Rüdiger

Universidad Carlos III de Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain

Adrien Vigier

University of Oxford - Department of Economics ( email )

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

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