Informational Puts

Andrew Koh, Sivakorn Sanguanmoo, Kei Uzui
11/14/2024
econ.THcs.MA

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Abstract

We analyze how dynamic information should be provided to uniquely implement the largest equilibrium in binary-action coordination games. The designer offers an informational put: she stays silent if players choose her preferred action, but injects asymmetric and inconclusive public information if they lose faith. There is (i) no multiplicity gap: the largest (partially) implementable equilibrium can be implemented uniquely; and (ii) no commitment gap: the policy is sequentially optimal. Our results have sharp implications for the design of policy in coordination environments.

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Cite this paper

@article{koh2024informational,
  title  = {Informational Puts},
  author = {Andrew Koh and Sivakorn Sanguanmoo and Kei Uzui},
  year   = {2024},
  eprint = {2411.09191},
  archivePrefix = {arXiv},
  url    = {http://arxiv.org/abs/2411.09191v2}
}

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