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Revealed Information

Author

Listed:
  • Laura Doval
  • Ran Eilat
  • Tianhao Liu
  • Yangfan Zhou

Abstract

An analyst observes the frequency with which a decision maker (DM) takes actions, but does not observe the frequency of actions conditional on the payoff-relevant state. We ask when can the analyst rationalize the DM's choices as if the DM first learns something about the state before taking action. We provide a support function characterization of the triples of utility functions, prior beliefs, and (marginal) distributions over actions such that the DM's action distribution is consistent with information given the agent's prior and utility function. Assumptions on the cardinality of the state space and the utility function allow us to refine this characterization, obtaining a sharp system of finitely many inequalities the utility function, prior, and action distribution must satisfy. We apply our characterization to study comparative statics and ring-network games, and to identify conditions under which a data set is consistent with a public information structure in first-order Bayesian persuasion games. We characterize the set of distributions over posterior beliefs that are consistent with the DM's choices. Assuming the first-order approach applies, we extend our results to settings with a continuum of actions and/or states.%

Suggested Citation

  • Laura Doval & Ran Eilat & Tianhao Liu & Yangfan Zhou, 2024. "Revealed Information," Papers 2411.13293, arXiv.org.
    • Handle: RePEc:arx:papers:2411.13293
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    File URL: http://arxiv.org/pdf/2411.13293
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    References listed on IDEAS

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