COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1802 Dynamic Strategic Information Transmission Mikhail Golosov, Vasiliki Skreta, Aleh Tsyvinski, and Andrea Wilson May 2011 This paper studies strategic information transmission in a dynamic
environment where, each period, a privately informed expert sends a message and a decision
maker takes an action. Our main result is that, in contrast to a static environment, full
information revelation is possible. The gradual revelation of information and the eventual
full revelation is supported by the dynamic rewards and punishments. The construction of a
fully revealing equilibrium relies on two key features. The first feature is that the
expert is incentivized, via appropriate actions, to join separable groups in which she
initially pools with far-away types, then later reveals her type. The second feature is
the use of trigger strategies. The decision maker is incentivized by the reward of further
information revelation if he chooses the separation-inducing actions, and the threat of a
stop in information release if he does not. Our equilibrium is non-monotonic. With
monotonic partition equilibria, full revelation is impossible. |
