Econometrica: Nov 2017, Volume 85, Issue 6

Persuasion of a Privately Informed Receiver

DOI: 10.3982/ECTA13251
p. 1949-1964

Anton Kolotilin, Tymofiy Mylovanov, Andriy Zapechelnyuk, Ming Li

We study persuasion mechanisms in linear environments. A receiver has a private type and chooses between two actions. A sender designs a persuasion mechanism or an experiment to disclose information about a payoff‐relevant state. A persuasion mechanism conditions information disclosure on the receiver's report about his type, whereas an experiment discloses information independent of the receiver's type. We establish the equivalence of implementation by persuasion mechanisms and by experiments, and characterize optimal persuasion mechanisms.

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Supplemental Material

Supplement to "Persuasion of a Privately Informed Receiver"

In this Appendix, we allow the receiver to make a choice among multiple actions. We characterize the implementable receiver's interim utilities and show that the sender can generally implement a strictly larger set of the receiver's interim utilities by persuasion mechanisms than by experiments. We also formulate the sender's optimization problem and show that the sender can achieve a strictly higher expected utility by persuasion mechanisms than by experiments.

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