October 6, 2020, 17:00–18:30
Economic Theory Seminar
We consider a standard persuasion problem in which the receiver's action and the state of the world are both one-dimensional. Fully characterizing optimal signals when utilities are non-linear is a daunting task. Instead, we develop a general approach to understanding a key qualitative property of optimal signals: their assortative structure, which describes the overall pattern of what states are pooled together. We derive simple conditions|driven by intuitive economic properties, such as supermodularity and submodularity of preferences|for the optimality of positive and negative assortative patterns of information disclosure. Our approach unifies a wide range of previous findings and generates new applications.