Dynamic Persuasion With Outside Information
43 Pages Posted: 26 Apr 2018 Last revised: 5 May 2018
Date Written: April 26, 2018
We examine the dynamic interaction between an agent and a principal aiming to persuade the former to approve a proposal of uncertain value. We allow for inside as well as outside information. The former is generated by the principal, who in turn exerts no control over the latter. Pareto efficiency requires the agent never to wait for outside information. We fully characterize the conditions in which equilibrium outcomes are efficient and discuss two leading applications: drug reviews and scholarly peer review.
Keywords: Dynamic Information Provision, Bayesian Persuasion, Drug Approval, Scholarly Peer Review
JEL Classification: C72, C73, D83
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