Strategic Ignorance and Information Design

Abstract

We study information design in strategic settings when agents can publicly refuse to view their private signals. The requirement that agents must be willing to view their signals represents additional constraints for the designer, comparable to participation constraints in mechanism design. Ignoring those constraints may lead to substantial divergence between the designer’s intent and actual outcomes, even in the case where the designer seeks to maximize the agents’ payoffs. We characterize implementable distributions over states and actions. Requiring robustness to strategic ignorance undoes two standard information design results: providing information conditional on players’ choices rather than all at once may hurt the designer, and communication between players may help her.

Keywords: Bayes correlated equilibrium, incomplete information games, information design, robustness, strategic ignorance

JEL Classification: C72, D82, D83