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Abstract
This paper introduces private sender information into a sender-receiver game of Bayesian persuasion with monotonic sender preferences. I derive properties of increasing differences related to the precision of signals and use these to fully characterize the set of equilibria robust to the intuitive criterion. In particular, all such equilibria are either separating, i.e., the sender's choice of signal reveals his private information to the receiver, or fully disclosing, i.e., the outcome of the sender's chosen signal fully reveals the payoff-relevant state to the receiver. Incentive compatibility requires the high sender type to use sub-optimal signals and therefore generates a cost for the high sender type in comparison to a full information benchmark in which the receiver knows the sender's type. The receiver prefers the equilibrium outcome over this benchmark for large classes of monotonic sender preferences.
Document type: | Working paper |
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Series Name: | Discussion Paper Series, University of Heidelberg, Department of Economics |
Volume: | 577 |
Place of Publication: | Heidelberg |
Date Deposited: | 11 Dec 2014 08:40 |
Date: | November 2014 |
Number of Pages: | 31 |
Faculties / Institutes: | The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics |
DDC-classification: | 330 Economics |
Uncontrolled Keywords: | Bayesian Persuasion, Signaling. |
Series: | Discussion Paper Series / University of Heidelberg, Department of Economics |