IDEAS home Printed from https://ideas.repec.org/p/swe/wpaper/2024-04.html
   My bibliography  Save this paper

Persuasion Meets Delegation

Author

Listed:
  • Anton Kolotilin

    (School of Economics, UNSW Business School)

  • Andriy Zapechelnyuk

    (School of Economics, University of Edinburgh)

Abstract

A principal can restrict an agent’s information (the persuasion problem) or discretion (the delegation problem). We study these two problems under standard single-crossing assumptions on the agent’s marginal utility. We show that these problems are equivalent on the set of monotone stochastic mechanisms, implying, in particular, the equivalence of deterministic delegation and monotone partitional persuasion. We also show that the monotonicity restriction is superfluous for linear persuasion and linear delegation, implying their equivalence on the set of all stochastic mechanisms. Finally, using tools from the persuasion literature, we characterize optimal delegation mechanisms, thereby generalizing and extending existing results in the delegation literature.

Suggested Citation

  • Anton Kolotilin & Andriy Zapechelnyuk, 2024. "Persuasion Meets Delegation," Discussion Papers 2024-04, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2024-04
    as

    Download full text from publisher

    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2024-04.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mylovanov, Tymofiy, 2008. "Veto-based delegation," Journal of Economic Theory, Elsevier, vol. 138(1), pages 297-307, January.
    2. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    3. Wouter Dessein, 2002. "Authority and Communication in Organizations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 811-838.
    4. Anton Kolotilin & Tymofiy Mylovanov & Andriy Zapechelnyuk & Ming Li, 2017. "Persuasion of a Privately Informed Receiver," Econometrica, Econometric Society, vol. 85(6), pages 1949-1964, November.
    5. Kolotilin, Anton, 2018. "Optimal information disclosure: a linear programming approach," Theoretical Economics, Econometric Society, vol. 13(2), May.
    6. Piotr Dworczak & Giorgio Martini, 2019. "The Simple Economics of Optimal Persuasion," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 1993-2048.
    7. Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
    8. Baron, David P & Myerson, Roger B, 1982. "Regulating a Monopolist with Unknown Costs," Econometrica, Econometric Society, vol. 50(4), pages 911-930, July.
    9. Martimort, David & Semenov, Aggey, 2006. "Continuity in mechanism design without transfers," Economics Letters, Elsevier, vol. 93(2), pages 182-189, November.
    10. John K.‐H. Quah & Bruno Strulovici, 2012. "Aggregating the Single Crossing Property," Econometrica, Econometric Society, vol. 80(5), pages 2333-2348, September.
    11. Luis Rayo & Ilya Segal, 2010. "Optimal Information Disclosure," Journal of Political Economy, University of Chicago Press, vol. 118(5), pages 949-987.
    12. Kovác, Eugen & Mylovanov, Tymofiy, 2009. "Stochastic mechanisms in settings without monetary transfers: The regular case," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1373-1395, July.
    13. Manuel Amador & Kyle Bagwell, 2013. "The Theory of Optimal Delegation With an Application to Tariff Caps," Econometrica, Econometric Society, vol. 81(4), pages 1541-1599, July.
    14. Krishna, Vijay, 2001. "Asymmetric Information and Legislative Rules: Some Amendments," American Political Science Review, Cambridge University Press, vol. 95(2), pages 435-452, June.
    15. Michael Ostrovsky & Michael Schwarz, 2010. "Information Disclosure and Unraveling in Matching Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 34-63, May.
    16. Kolotilin, Anton & Li, Hao & Li, Wei, 2013. "Optimal limited authority for principal," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2344-2382.
    17. Yingni Guo & Eran Shmaya, 2019. "The Interval Structure of Optimal Disclosure," Econometrica, Econometric Society, vol. 87(2), pages 653-675, March.
    18. Nahum D. Melumad & Toshiyuki Shibano, 1991. "Communication in Settings with No. Transfers," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 173-198, Summer.
    19. Matthew Gentzkow & Emir Kamenica, 2016. "A Rothschild-Stiglitz Approach to Bayesian Persuasion," American Economic Review, American Economic Association, vol. 106(5), pages 597-601, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kolotilin, Anton & Li, Hongyi, 2021. "Relational communication," Theoretical Economics, Econometric Society, vol. 16(4), November.
    2. Andreas Kleiner, 2022. "Optimal Delegation in a Multidimensional World," Papers 2208.11835, arXiv.org.
    3. Andriy Zapechelnyuk, 2020. "Optimal Quality Certification," American Economic Review: Insights, American Economic Association, vol. 2(2), pages 161-176, June.
    4. Parakhonyak, Alexei & Vikander, Nick, 2023. "Information design through scarcity and social learning," Journal of Economic Theory, Elsevier, vol. 207(C).
    5. Maxim Ivanov, 2021. "Optimal monotone signals in Bayesian persuasion mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 955-1000, October.
    6. Ginzburg, Boris, 2019. "Optimal information censorship," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 377-385.
    7. Andreas Kleiner & Benny Moldovanu & Philipp Strack, 2021. "Extreme Points and Majorization: Economic Applications," Econometrica, Econometric Society, vol. 89(4), pages 1557-1593, July.
    8. Emir Kamenica & Kyungmin Kim & Andriy Zapechelnyuk, 2021. "Bayesian persuasion and information design: perspectives and open issues," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 701-704, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anton Kolotilin & Andriy Zapechelnyuk, 2018. "Persuasion Meets Delegation," Discussion Papers 2018-06, School of Economics, The University of New South Wales.
    2. Kolotilin, Anton & Li, Hongyi, 2021. "Relational communication," Theoretical Economics, Econometric Society, vol. 16(4), November.
    3. Maryam Saeedi & Ali Shourideh, 2020. "Optimal Rating Design under Moral Hazard," Papers 2008.09529, arXiv.org, revised Jul 2023.
    4. Ozan Candogan & Philipp Strack, 2021. "Optimal Disclosure of Information to a Privately Informed Receiver," Papers 2101.10431, arXiv.org, revised Jan 2022.
    5. Krähmer, Daniel & Kováč, Eugen, 2016. "Optimal sequential delegation," Journal of Economic Theory, Elsevier, vol. 163(C), pages 849-888.
    6. Ricardo Alonso & Niko Matouschek, 2008. "Optimal Delegation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(1), pages 259-293.
    7. Maxim Ivanov, 2021. "Optimal monotone signals in Bayesian persuasion mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 955-1000, October.
    8. Letina, Igor & Liu, Shuo & Netzer, Nick, 2020. "Delegating performance evaluation," Theoretical Economics, Econometric Society, vol. 15(2), May.
    9. Kolotilin, Anton, 2018. "Optimal information disclosure: a linear programming approach," Theoretical Economics, Econometric Society, vol. 13(2), May.
    10. Anton Kolotilin & Alexander Wolitzky, 2020. "Assortative Information Disclosure," Discussion Papers 2020-08, School of Economics, The University of New South Wales.
    11. Anton Kolotilin & Tymofiy Mylovanov & Andriy Zapechelnyuk, 2019. "Censorship as Optimal Persuasion," Discussion Paper Series, School of Economics and Finance 201903, School of Economics and Finance, University of St Andrews, revised 05 Mar 2020.
    12. Liang, Pinghan, 2013. "Optimal delegation via a strategic intermediary," Games and Economic Behavior, Elsevier, vol. 82(C), pages 15-30.
    13. Lyu, Chen, 2023. "Information design for selling search goods and the effect of competition," Journal of Economic Theory, Elsevier, vol. 213(C).
    14. Tsakas, Elias & Tsakas, Nikolas, 2021. "Noisy persuasion," Games and Economic Behavior, Elsevier, vol. 130(C), pages 44-61.
    15. Zeng, Yishu, 2023. "Derandomization of persuasion mechanisms," Journal of Economic Theory, Elsevier, vol. 212(C).
    16. Whitmeyer, Joseph & Whitmeyer, Mark, 2021. "Mixtures of mean-preserving contractions," Journal of Mathematical Economics, Elsevier, vol. 94(C).
    17. Kolotilin, Anton & Li, Hao & Li, Wei, 2013. "Optimal limited authority for principal," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2344-2382.
    18. Dworczak, Piotr & Kolotilin, Anton, 2024. "The persuasion duality," Theoretical Economics, Econometric Society, vol. 19(4), November.
    19. Lily Ling Yang, 2024. "Information Design with Costly State Verifi cation," CRC TR 224 Discussion Paper Series crctr224_2024_502, University of Bonn and University of Mannheim, Germany.
    20. Candogan, Ozan & Strack, Philipp, 2023. "Optimal disclosure of information to privately informed agents," Theoretical Economics, Econometric Society, vol. 18(3), July.

    More about this item

    Keywords

    persuasion; delegation; discriminatory disclosure;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:swe:wpaper:2024-04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hongyi Li (email available below). General contact details of provider: https://edirc.repec.org/data/senswau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.