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TOPIC:
ASSORTATIVE INFORMATION DISCLOSURE
ABSTRACT
We consider a standard persuasion problem in which the receiver’s action and the state of the world are both one-dimensional. Fully characterizing optimal signals when utilities are non-linear is a daunting task. Instead, we develop a general approach to understanding a key qualitative property of optimal signals: their assortative structure, which describes the overall pattern of what states are pooled together. We derive simple conditions—driven by intuitive economic proper-ties, such as supermodularity and submodularity of preferences—for the optimality of positive and negative assortative patterns of information disclosure. Our approach unifies a wide range of previous findings and generates new applications.
Keywords: Persuasion, information design, assortative matching.