Informational Puts
Theoretical Economics
2024-12-31 v2 Multiagent Systems
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.
Cite
@article{arxiv.2411.09191,
title = {Informational Puts},
author = {Andrew Koh and Sivakorn Sanguanmoo and Kei Uzui},
journal= {arXiv preprint arXiv:2411.09191},
year = {2024}
}