Persuasion by Dimension Reduction

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Tác giả: Semyon Malamud, Andreas Schrimpf

Ngôn ngữ: eng

Ký hiệu phân loại: 150.194 Reductionism

Thông tin xuất bản: 2021

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 168034

Comment: This paper has been replaced and subsumed by arXiv:2210.00637. arXiv admin note: text overlap with arXiv:2102.10909How should an agent (the sender) observing multi-dimensional data (the state vector) persuade another agent to take the desired action? We show that it is always optimal for the sender to perform a (non-linear) dimension reduction by projecting the state vector onto a lower-dimensional object that we call the "optimal information manifold." We characterize geometric properties of this manifold and link them to the sender's preferences. Optimal policy splits information into "good" and "bad" components. When the sender's marginal utility is linear, revealing the full magnitude of good information is always optimal. In contrast, with concave marginal utility, optimal information design conceals the extreme realizations of good information and only reveals its direction (sign). We illustrate these effects by explicitly solving several multi-dimensional Bayesian persuasion problems.
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