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Dynamic Information Provision: Rewarding the Past and Guiding the Future

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  • Ian Ball

Abstract

I study the optimal provision of information in a long‐term relationship between a sender and a receiver. The sender observes a persistent, evolving state and commits to send signals over time to the receiver, who sequentially chooses public actions that affect the welfare of both players. I solve for the sender's optimal policy in closed form: the sender reports the value of the state with a delay that shrinks over time and eventually vanishes. Even when the receiver knows the current state, the sender retains leverage by threatening to conceal the future evolution of the state.

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  • Ian Ball, 2023. "Dynamic Information Provision: Rewarding the Past and Guiding the Future," Econometrica, Econometric Society, vol. 91(4), pages 1363-1391, July.
    • Handle: RePEc:wly:emetrp:v:91:y:2023:i:4:p:1363-1391
    DOI: 10.3982/ECTA17345
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    References listed on IDEAS

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    Cited by:

    1. Gottardi, Piero & Mezzetti, Claudio, 2024. "Shuttle diplomacy," Journal of Economic Theory, Elsevier, vol. 216(C).
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    3. Chia-Hui Chen & Hulya Eraslan & Junichiro Ishida & Takuro Yamashita, 2024. "Optimal Feedback Dynamics Against Free-Riding in Collective Experimentation," ISER Discussion Paper 1247, Institute of Social and Economic Research, Osaka University.

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