Louis Luther (BGSE) 18.01.2023

I study information design in selection problems. There is a receiver who selects one out of many alternatives and takes an action, and a sender who transmits information about the viability of alternatives to persuade the receiver to select a favorable alternative and take a favorable action. The main theorem characterizes which distributions of posterior beliefs about the favorable alternative conditional on selection can be induced by some signal structure. This theorem facilitates a decomposition of the multi-dimensional information design problem into a selection persuasion problem and an action persuasion problem. I analyze applications of the model to advertising and lobbying.