Lectures on Information Design:

Single Receiver

Simone Galperti
UC, San Diego
 Introduction

▶ An agent’s beliefs are an important driver of his behavior

▶ At least in some settings, the beliefs of an agent can be influenced

by another interested actor (advertisement, government agency,
research agency, etc.)
▶ Questions:
▶ Feasibility: what is the scope for changing the agent’s behavior by
designing his information environment?
▶ Optimality: what is the optimal information for the agent from the
viewpoint of its designer?

▶ Issue: how does the agent interpret the messages provided by the
information provider?
▶ Strategic information transmission (Crawford-Sobel ’82, etc.): the
meaning of a message is determined in equilibrium.
▶ Information design: the meaning is objectively given because the
designer can commit to it (how? wait for the model...)
 Information vs Mechanism Design

▶ The behavior of an agent depends on his beliefs, his feasible choices,

and the resulting final payoffs
▶ Mechanism design: focuses on feasible choices and payoffs,
information taken as given
▶ mechanism design with “monetary” incentives (transferable or
non-transferable utility): steer the agent(s) decisions by changing
their payoff consequences
▶ delegation: steer the agent(s) decisions by constraining the set of
feasible actions
▶ matching/market design without “money”: steer the agent(s)
decisions by designing the rules whereby reports about preferences
map to final allocations of objects
▶ broadly speaking: design of institutions (i.e., the game)
 Information vs Mechanism Design

▶ Information design:
▶ payoff functions and feasible outcomes (i.e., the game) taken as given
▶ object of design: information of the agent(s)—hence, the beliefs
driving choices
▶ importantly, information follows fundamentally different rules and
structure than money/choice constraints/matching functions
▶ Bayes’ rule
▶ multidimensional
▶ framing
▶ cannot take it back

▶ There are papers that do both

(e.g., Dworzack (’18), Bergemann-Brooks-Morris (’17))
Bayesian Persuasion
 Basic Model (Kamenica-Gentzkow (’11))

▶ Single receiver of information (the agent)

▶ A: finite set of feasible actions
▶ Ω: finite set of states of the world
▶ u(a, ω): payoff function – non-trivial dependence on ω
▶ µ0 ∈ ∆(Ω): prior belief

▶ Single provider of information (the designer)

▶ v(a, ω): payoff function
▶ µ0 : prior belief
▶ designs signal/experiment/information structure
 Basic Model (Kamenica-Gentzkow (’11))

▶ Information structure
▶ S: finite set of signal realizations (signals, for short)
▶ π = {π(·|ω)}ω∈Ω : family of conditional distributions on S, one for
each state
▶ Remark: S = ∪ supp π(·|ω), where supp π(·|ω) is support of π(·|ω)
ω∈Ω

▶ Assumptions: designer can pick any information structure at no cost

(great flexibility)
▶ Examples: Ω = {g, i}, µ0 (g) = 0.3, S = {s, s′ }
▶ fully uninformative π: π(s|ω) = π(s′ |ω) for all ω
▶ fully informative π: π(s|g) = 1, π(s′ |i) = 1
▶ partially informative π: π(s|g) = 1, π(s|i) = 1
2
 Timeline

1. designer picks and commits to π

2. ω realizes

3. agent observes s from π(·|ω)

4. agent chooses his action

5. payoffs are realized

 Basic Model: Key Assumptions

▶ Bayesianism
▶ The agent updates µ0 given signal s from π using Bayes’ rule
▶ Bayesian posterior belief

π(s|ω)µ0 (ω)
µs (ω) = ∑
π(s|ω ′ )µ0 (ω ′ )
ω ′ ∈Ω

▶ Essential constraint on what the designer can do

▶ Designer-preferred equilibrium:
▶ let A∗ (µ) = arg maxa∈A Eµ [u(a, ω)]
▶ if |A∗ (µ)| ≥ 2, the agent breaks ties in favor of designer: chooses
a ∈ A∗ (µ) that maximizes Eµ [v(a, ω)]

▶ Timing:
▶ designer commits to π before ω realizes (symmetric information)
▶ ω realizes and π produces signal s
▶ the agent observes only s, updates, chooses action
 Discussion of Commitment

▶ Commitment to information structure before state realization:

▶ no signaling through info structure
▶ objective meaning of signals (vs. equilibrium meaning in cheap talk)
▶ debated (persuader always has some info; commitment to noise?)
▶ KG justify it based on “reasonable approximation” in some settings
▶ reputation foundation (Best and Quigley (’17), Mathevet et al. (’19))

▶ Costless production of information:

▶ more precisely: common fixed cost
▶ depending on cost function, some techniques may extend unchanged
(e.g., generalized entropy cost (Gentzkow and Kamenica (’14))

▶ Designer-preferred equilibrium:
▶ in the spirit of partial implementation
▶ sometimes it leads to unintuitive/uninteresting predictions
▶ we will consider designer-worst/adversarial equilibrium later
 Alternative Approaches of Analysis
Observation: signal s → posterior µs → â(µs ) → v(â(µs ), ω)

▶ Belief approach:
▶ define v̂(µ) = Eµ [v(â(µ), ω)]
▶ each π induces distribution τ ∈ ∆(∆(Ω)) over posteriors:
∑ ∑
τ (µ) = π(s|ω)µ0 (ω)
ω∈Ω s:µs =µ

▶ Idea: choose τ to maximize Eτ [v̂(µ)]

▶ Myersonian action-recommendation approach:

▶ each π(·|ω) induces a distribution x(·|ω) ∈ ∆(A) over actions:
∑
x(a|ω) = π(s|ω)
s:â(µs )=a

▶ Idea: let S ⊆ A, require obedience (i.e., â(µa ) = a), and choose x to

maximize ∑
v(a, ω)x(a|ω)µ0 (ω)
ω∈Ω,a∈A
 Alternative Approaches of Analysis

Observation: there exists a π that induces τ if and only if

∑
µ(ω)τ (µ) = µ0 (ω), ω ∈ Ω (Bayes plausibility)
µ∈supp τ

Proposition. The following are equivalent:

1. there exists a π that gives the designer expected payoff v∗ ;
2. there exists a Bayes-plausible distribution of posteriors τ that
gives the designer expected payoff Eτ [v̂(µ)] = v∗ ;
3. there exists an obedient recommendation function x that gives the
designer expected payoff v∗ .

Note: (1) ⇔ (3) by revelation principle (Myerson (’86))

 Belief Approach

The problem of finding an optimal π is equivalent to the problem

∑
v∗ = max v̂(µ)τ (µ)
τ
µ∈supp τ

∑
s.t. µτ (µ) = µ0
µ∈supp τ

Given optimal τ ∗ , construct optimal π ∗ by

µ(ω)τ ∗ (µ)
π ∗ (sµ |ω) =
µ0 (ω)
Concavification (see also Aumann and Maschler (’95))

Observations (SEE FIGURE):

▶ domain of v̂ is ∆(Ω), which is convex
▶ let the graph of v̂ be Γv̂ = {(µ, z) : µ ∈ ∆(Ω), z = v̂(µ)}
▶ τ defines a convex combination of points µ ∈ ∆(Ω) and v̂(µ) in the
range of v̂, so of points in Γv̂
▶ let co(Γv̂ ) be the set of all convex combinations of points in Γv̂ and

V(µ) = sup{z : (µ, z) ∈ co(Γv̂ )}

Note: V(µ) = smallest concave function w s.t. w(µ) ≥ v̂(µ) for all µ
▶ Bayes plausibility implies that

v∗ = V(µ0 )

Characterization method: find “concavification” V and evaluate it at µ0

 When Does Persuasion Work?

Note: the designer benefits from persuasion if and only if V(µ0 ) > v̂(µ0 )

Definition. (1) There is information the designer would share if ∃µ s.t.

v̂(µ) > Eµ [v(â(µ0 ), ω)]

Definition. (2) The agent’s preference is discrete at µ if ∃ε > 0 s.t.

Eµ [u(â(µ), ω)] > Eµ [u(a, ω)] + ε, ∀a ̸= â(µ)

Proposition. If (1) holds and (2) holds for µ = µ0 , then V(µ0 ) > v̂(µ0 )
 When Does Persuasion Work? Proof sketch

Proposition. If (1) holds and (2) holds for µ = µ0 , then V(µ0 ) > v̂(µ0 )

Proof sketch:
▶ by (1), v̂(µ) > Eµ [v(â(µ0 ), ω)] for some µ ̸= µ0
▶ by (2), ∃ neighborhood M ⊂ int ∆(Ω) of µ0 s.t. â(µ′ ) = â(µ0 ) for
all µ′ ∈ M
▶ for µ′ ∈ M, let τ be s.t. µ0 = τ µ′ + (1 − τ )µ
▶ it follows that

Eτ [v̂(µ)] = τv̂(µ′ ) + (1 − τ )v̂(µ)

= τ Eµ′ [v(â(µ0 ), ω)] + (1 − τ )v̂(µ)
> τ Eµ′ [v(â(µ0 ), ω)] + (1 − τ )Eµ [v(â(µ0 ), ω)]
= v̂(τ µ′ + (1 − τ )µ) (by linearity of Eµ )
= v̂(µ0 )
 Properties of Optimal π

Proposition. Suppose τ is optimal and ∃µ ∈ supp τ s.t. v(â(µ), ω) <

v(a, ω) for all ω and a ̸= â(µ). Then, µ(ω) = 0 for all ω s.t.

{â(µ)} ̸= arg max u(a, ω)

a∈A

Intuition:
▶ if not, signals inducing µ also arise in ωs where â(µ) is not optimal
for the agent
▶ yet this does not help the designer to prevent worst action â(µ)
▶ let such ωs induce some other signal and so µ′ and â(µ′ ) with
v(â(µ′ ), ω) > v(â(µ), ω)

Punchline: useless to keep the agent uncertain about optimality of his

decision when choosing worst action for you
 Properties of Optimal π

Proposition. Suppose V(µ0 ) > v̂(µ0 ), τ is optimal, and ∃µ ∈ supp τ

such that µ is interior. Then, the agent’s preference is not discrete at µ
(generically wrt v)

Intuition (SEE FIGURE):

▶ V(µ0 ) > v̂(µ0 ) implies some information is conveyed to agent
▶ µ interior implies that some information is withheld from agent
▶ if at µ ∃ε > 0 s.t.

Eµ [u(â(µ), ω)] > Eµ [u(a, ω)] + ε, ∀a ̸= â(µ)

then signal s inducing µ conveys too much info: let “bad” states for
the agent give rise to s with higher probability

Punchline: when withholding information, do so up to be point where

agent is indifferent
 Pros and Cons of Concavification

▶ Pros:
▶ elegant
▶ reduces search from large space of πs to “smaller” space of τ s
▶ allows for application of convex-analysis tools

▶ Cons:
▶ can be hard to characterize V (→ numerical methods?)
▶ can be hard to derive τ ∗ from V(µ0 )
▶ is essentially graphical method → hard to use unless one can graph V
▶ gets even harder with multiple agents playing a game (see later)
Rotshild-Stiglitz Approach
 The Model (Gentzkow-Kamenica (’16))

▶ Ω = [0, 1] with prior CDF F0 (x) = Pr(ω ≤ x)

▶ Information structure is family of distributions {π(·|ω)}ω∈Ω over
some S
▶ A = {a0 , . . . , an }: finite action set of the agent
▶ Given posterior µ, â(µ) = ai if and only if γi ≤ Eµ [ω] ≤ γi+1 for
γ0 ≤ γ1 ≤ . . . ≤ γn ∈ [0, 1]
▶ The designer payoff depends only on a: v(a, ω) = v(a) for all (a, ω)

Implication: the designer only cares about distribution over posterior

means, i.e., Eµs [ω]

Question: can we characterize the set of all distributions over posterior

means that can be induced by some π?
Feasible Distributions over Posterior Means

▶ Given π, let Gπ be CDF of posterior means induced by π:

Gπ (t) = Prπ (Eµs [ω] ≤ t)

∫
▶ Given Gπ , define cπ (x) = 0x Gπ (t)dt

▶ Example: F0 is uniform on [0, 1]

{
0 if t < 12
▶ π fully uninformative ⇒ Gπ (t) =
1 if t ≥ 12
{
1
0 if t <
π fully uninformative ⇒ cπ (x) = 2
x − 12 if t ≥ 1
2

▶ π fully informative ⇒ Gπ (t) = t ⇒ cπ (x) = 1 x2

2
 Feasible Distributions over Posterior Means
▶ Given π, let Gπ be CDF of posterior means induced by π:
Gπ (t) = Prπ (Eµs [ω] ≤ t)
∫
▶ Given any Gπ , define cπ (x) = 0x Gπ (t)dt

Proposition. Let c : [0, 1] → R. There exists an information structure

π that satisfies cπ = c if and only if c is convex and cπ ≤ c ≤ cπ

▶ given π, • cπ is convex because CDF Gπ is non-decreasing

given π, • π is garbling of π ⇒ Gπ is MPS of Gπ ⇒ cπ ≥ cπ
given π, • π is garbling of π ⇒ Gπ is MPS of Gπ ⇒ cπ ≥ cπ
▶ given c, • define 

0 if x < 1
G(x) = c′ (x+ ) if 0 ≤ x < 1


1 if x ≥ 1
given c, • G is a CDF and F0 is MPS of G
given c, • Kolotilin (’14): ∃π that induces G
 Optimal Information Structures?

▶ Can we use this to characterize optimal information structures?

▶ Recall: the designer’s payoff depends only on a

▶ For simplicity, suppose v(ai ) > v(ai−1 ) for all i = 1, . . . , n

⇒ when Eµ [ω] = γi , the agent chooses ai as preferred by designer
▶ Observation:
c′ (γi− ) − c′ (γi−1
−
) = Pr(a = ai−1 )

▶ Solution involves choosing piecewise linear c s.t.

▶ cπ ≤ c ≤ cπ
▶ slopes change at γi ’s
▶ slopes are non-decreasing (by convexity)
Persuasion as a Walrasian Economy
 Another Perspective (Dworczak-Martini (’18))

Model:
▶ Ω = [0, 1] with prior CDF F0 (x) = Pr(ω ≤ x)
▶ Information structure is family of distributions {π(·|ω)}ω∈Ω over
some S
▶ Let ms = Eµs [ω]
▶ Assume designer’s payoff depends only on posterior means: v(m)
▶ Recall: G is feasible CDF of posterior means iff F0 is MPS of G

Assumption. (Regularity) v is upper semi-continuous with finitely many

jumps and has otherwise bounded slope

Problem: ∫ 1
max v(x)dG(x)
G:F0 if MPS of G 0
 Another Perspective (Dworczak-Martini (’18))

Theorem. Assume Regularity. There exists optimal G. Moreover, G is

optimal if and only if there exists p : [0, 1] → R s.t. (G, p) satisfy
1. p is convex and p(m) ≥ v(m) for all m ∈ [0, 1]
2. supp G ⊆ {m ∈ [0, 1] : p(m) = v(m)}
∫1 ∫1
3. 0 p(m)dG(m) = 0 p(m)dF0 (m)
4. F0 is MPS of G.

Proposition. Assume Regularity and F0 has full support and no mass

point. If (G, p) satisfy 1-4, for any [a, b] ⊆ [0, 1] either (i) or (ii) holds:
(i) if p is strictly convex on [a, b], then p(m) = v(m) and G(m) = F0 (m)
for m ∈ [a, b]
(ii) if p is affine on [a, b] and this is a maximal interval on which p is
∫b ∫b
affine, then G(a) = F0 (a), G(b) = F0 (b), a tdG(t) = a tdF0 (t), and
p(c) = v(c) for at least one c ∈ [a, b]
 Interpretation: A Walrasian Economy

▶ m ∈ [0, 1] ≈ type of good

▶ G ≈ a bundle of goods: G(m) is mass of goods in [0, m]

▶ Designer ≈ single consumer with endowment F0 and utility function

∫ 1
v(m)dG(m)
0

▶ Single competitive firm with technology to produce Z so that

G = F0 + Z is MP contraction of F0 :
∫m
▶ Z(t)dt ≤ 0 for all m ∈ [0, 1]
0

▶ Z(1) = 0 (no free disposal)

∫
▶ 1 Z(t)dt = 0 (mean preserved – integration by parts)
0
 Walrasian Equilibrium

Definition. (G, Z, p) is a Walrasian equilibrium if

∫1
1. Z max ψ = 0 p(m)dZ(m)
∫1 ∫1 ∫1
2. G max 0 v(m)dG(m) s.t. 0 p(m)dG(m) ≤ 0 p(m)dF0 (m) + ψ
3. markets clear: G = F0 + Z

Observation: (G, Z, p) is Walrasian Equilibrium iff (G, p′ ) is solution to

1-4 for p′ = λp + β
∫ ∫
▶ (3) + ψ = 0 in equilibrium ⇒ 01 p(m)dG(m) = 01 p(m)dF0 (m)
▶ linear objective ⇒ supp G ⊆ arg maxm {u(m) − λp(m)} where λ is
Lagrange multiplier
▶ define β = maxm {u(m) − λp(m)} ⇒ p′ ≥ u
▶ p must be convex: if not, ∃Z producing ψ = +∞

Comment: interesting economic analogy

 Application: Motivating Effort

▶ ω ∈ [0, 1]: value of project if completed successfully, ω ∼ F0

▶ e ∈ [0, e]: agent’s effort, which equal probability of success
▶ effort cost c(e) = eη with η > 1
▶ q ∈ (0, 1): share of the value received by agent
▶ given posterior mean m, optimal effort is
{( ) η−1
1 }
qm
e∗ (m) = min ,e
η

▶ suppose e∗ (m) = e for some 0 < m < 1 and EF0 [ω] < m
▶ implied designer’s payoff: v(m) = (1 − q)e∗ (m)m.
▶ note: v(m) strictly convex on [0, m], affine over [m, 1], and
v′ (m− ) > v′ (m+ ) (FIGURE)
 Application: Motivating Effort

Proposition. Let ω ∗ be defined by EF0 [ω|ω ≥ ω ∗ ] = m. It is optimal

fully discloses ω < ω ∗ and the event {ω ≥ ω ∗ }

Proof by construction (or guess and verify) of (G, p) that satisfy 1-4:
▶ p(m) = v(m) for m ≤ ω ∗ and then linear
▶ G(m) = F0 (m) for m < ω ∗ and mass point 1 − F0 (ω ∗ ) at ω ∗

Intuition:
▶ start from fully informative F0
▶ pooling all ω ≥ m in signal s changes nothing and induces m′s > m
⇒ profitable to “pool” some ω < m in s, lower m′s , and still get e
▶ consider ω < ω ′ < m: want to pool ω ′ “as much as possible” before
pooling ω, as pooling ω ′ lowers ms by less than does ω
▶ never optimal to pool ω < ω ∗ < m by convexity of v(m)
 The General Case
General Bayesian persuasion:
∫ ∫
max v̂(µ)δτ (µ) s.t. µdτ (µ) = µ0
τ ∈∆(∆(Ω)) ∆(Ω) ∆(Ω)

Definition. p : ∆(Ω) → R is outer-convex if

∫
p(µ) ≤ p(δω )dµ(ω), µ ∈ ∆(Ω)
Ω

Theorem. τ ∗ is optimal if there exists p∗ that satisfies

1. p∗ is outer-convex and p∗ (µ) ≥ v̂(µ) for all µ
2. supp τ ∗ ⊆ {µ ∈ ∆(Ω) : p∗ (µ) = v̂(µ)}
∫ ∫
3. ∆(Ω) p∗ (µ)dτ ∗ (µ) = Ω p∗ (δω )dµ0 (ω)
∫
4. ∆(Ω) µdτ ∗ (µ) = µ0
Myersonian Approach and Duality
 Action-Recommendation Approach

Based on Bergemann-Morris (’16), Kolotilin (’18), Galperti-Perego (’18)

Approach:
▶ use recommendation mechanism x : Ω → ∆(A)
▶ require obedience by the agent to recommendation: for every a ∈ A

Eµ0 ,x [u(a, ω) − u(a′ , ω)| recommended a] ≥ 0, a′ ∈ A

∑ x(a|ω)µ0 (ω)
⇔ [u(a, ω) − u(a′ , ω)] ∑ ≥ 0, a′ ∈ A
ω ′ ∈Ωx(a|ω ′ )µ0 (ω ′ )
ω∈Ω
∑
⇔ [u(a, ω) − u(a′ , ω)]x(a|ω)µ0 (ω) ≥ 0, a′ ∈ A
ω∈Ω
∑
▶ maximize ω∈Ω,a∈A v(a, ω)x(a|ω)µ0 (ω)
 Primal - Dual Pair
Primal problem: choose x ∈ RA×Ω to solve
∑
max V(x) = v(a, ω)x(a|ω)µ0 (ω) s.t.
ω∈Ω,a∈A
∑
▶ (O) Obedience: ′
ω∈Ω [u(a, ω) − u(a , ω)]x(a|ω)µ0 (ω) ≥ 0 for all
′
a, a ∈ A
∑
▶ (C) Consistency: a∈A x(a|ω) = 1 for all ω ∈ Ω
▶ (NN) Non-negativity: x(a|ω) ≥ 0 for all (a, ω) ∈ A × Ω

Dual problem: choose p ∈ RΩ and λ ∈ RA×A to solve

∑
min V ∗ (p, λ) = p(ω)µ0 (ω) s.t.
ω∈Ω

▶ (λ−NN) λ−Non-negativity: λ(a′ |a) ≥ 0 for all (a, a′ ) ∈ A × A

▶ (DC) Dual constraint: for all (a, ω) ∈ A × Ω
∑
p(ω) ≥ v(a, ω) + [u(a, ω) − u(a′ , ω)]λ(a′ |a)
a′ ∈A
 Complementary Slackness
Suppose x satisfies (O), (C), and (NN) and (p, λ) satisfy (λ−NN) and
(DC). Then, x and (p, λ) optimal iff
▶ for all a, a′ ∈ A
[ ]
∑
′ ′
λ(a |a) [u(a, ω) − u(a , ω)]x(a|ω)µ0 (ω) = 0
ω∈Ω

⇒ λ(a′ |a) > 0 only if agent indifferent when recommended a

▶ for all (a, ω) ∈ A × Ω
[ ]
∑
′ ′
x(a|ω)µ0 (ω) p(ω) − v(a, ω) − [u(a, ω) − u(a , ω)]λ(a |a) = 0
a′ ∈A

⇒a∈
/ supp x(a|ω) if dual constraint cannot hold with equality

Note: CS provides connection from dual variables to solution x

 Economic Interpretation of Dual
∑
Objective: min ω∈Ω p(ω)µ0 (ω)
▶ associate to each ω a monopolist seller of ω-quality probability
▶ designer buys probability π(s|ω) from seller ω, whose stock is µ0 (ω)
▶ designer pays unitary price p(ω) to seller ω
▶ goal = minimize value of extra unit of probability evenly spread
across sellers/states (otherwise, current stock not used in best way)

∑
Dual constraint: p(ω) = v(a, ω) + a′ ∈A [u(a, ω) − u(a′ , ω)]λ(a′ |a)
▶ designer pays her payoff v(a, ω)
▶ potential discount if u(a, ω) < u(a′ , ω) for some a′
▶ potential penalty if u(a, ω) > u(a′ , ω) for some a′
▶ gets discount/penalty only if λ(a′ |a), so only if agent indifferent
between a and a′ given recommendation a by CS
 Duality
Weak duality: if x satisfies (O), (C), and (NN) and (p, λ) satisfy
Weak duality: (λ−NN) and (DC), then V ∗ (p, λ) ≥ V(x)

Strong duality: ∃x′ that maximizes V(x) ⇔ ∃(p′ , λ′ ) that minimizes

Strong duality: V ∗ (p, λ) ⇔ V ∗ (p′ , λ′ ) = V(x′ )
▶ can be used to check optimality (e.g., after narrowing search)
▶ e.g., fully informative policy equivalent to x(aω |ω) = 1 for all ω
where
aω = max v(a, ω)
a∈A∗ (δω )

⇒ V(x). If ∃(p, λ) s.t. V ∗ (p, λ) = V(x), then x optimal

▶ e.g., no information policy equivalent to x(aµ0 |ω) = 1 for all ω where

aµ0 = max v(a, ω)

a∈A∗ (µ0 )

⇒ V(x). If ∃(p, λ) s.t. V ∗ (p, λ) = V(x), then x optimal

 Example: Investment Decision

▶ a firm (agent) has to decide whether to invest or not: a ∈ {I, NI}

▶ project can be good or bad: ω ∈ Ω = {G, B}, µ0 (G) = µ0 (B)

▶ u(NI, G) = u(NI, B) = 0, u(I, B) = −1, u(I, G) = r for 0 < r < 1

▶ v(I) = 1, v(NI) = 0
 Example: Investment Decision - Primal
1 1
max{x(I|G) + x(I|B) } s.t.
2 2
▶ (O): rx(I|G) − x(I|B) ≥ 0 and 0 ≥ rx(NI|G) − x(NI|B)
▶ (C): x(I|G) + x(NI|G) = 1 and x(I|B) + x(NI|B) = 1
▶ (NN): x(a|ω) ≥ 0 for all (a, ω)

Solution:
▶ use (C) to write second (O) constraint as

0 ≥ r [1 − x(I|G)] − [1 − x(I|B)] ⇔ rx(I|G) − x(I|B) ≥ r − 1

▶ so problem becomes

x(I|B)
max{x(I|G) + x(I|B)} s.t. x(I|G) ≥
r
▶ solution: x(I|G) = 1 and x(I|B) = r
Example: Investment Decision - Dual + CS

1 1
min{p(G) + p(B) } s.t.
2 2
▶ (DC): for a, a′ ∈ {I, NI} and a ̸= a′

p(G) ≥ v(a) + [u(a, G) − u(a′ , G)]λ(a′ |a)

p(B) ≥ v(a) + [u(a, B) − u(a′ , B)]λ(a′ |a)

▶ (λ−NN): λ(NI|I) ≥ 0 and λ(I|NI) ≥ 0
▶ (CS):
1
λ(NI|I) [rx(I|G) − x(I|B) − 0] =0
2
1
λ(I|NI) [0 − rx(NI|G) + x(NI|B)] = 0
2
1
x(a|ω) [p(ω) − v(a) − [u(a, ω) − u(a′ , ω)]λ(a′ |a)] = 0
2
 Example: Investment Decision - Dual + CS
Solution (holistic use of dual + CS):
p(G) ≥ 1 + rλ(NI|I) and p(G) ≥ 0 − rλ(I|NI)
p(B) ≥ 1 − λ(NI|I) and p(B) ≥ 0 + λ(I|NI)

▶ 1 + rλ(NI|I) > −rλ(I|NI) for all λ ≥ 0 ⇒ x(NI|G) = 0 and

x(I|G) = 1 by (CS) ⇒ p(G) = 1 + rλ(NI|I)
▶ x(NI|B) > 0, if not x always recommend I ⇒⇐ with x(I|G) > 0
▶ x(NI|B) > 0 and x(NI|G) = 0 ⇒ agent learns ω = B from recomm
NI ⇒ λ(I|NI) = 0 by CS
▶ by (CS), p(B) = 0
▶ by (DC), 0 ≥ 1 − λ(NI|I) ⇒ λ(NI|I) ≥ 1 ⇒ optimal λ(NI|I) = 1
▶ by (CS), since λ(NI|I) > 0, agent must be indifferent:
rx(I|G) − x(NI|G) = 0 ⇒ x(NI|G) = r
Application: Price Discrimination
 Application: Price Discrimination
(Bergemann et al. (’15))
Metaphorical interpretation of information design:
▶ single rational agent faces decision problem known to analyst
▶ analyst does not know agent’s information about ω ∈ Ω
▶ feasible outcomes = all predictions robust to agent’s actual
information
▶ no literal designer nor specific design objective

Application: price discrimination

▶ monopolist’s ability to price discriminate depends on her information
about consumers’ valuation for her good
▶ examples: no info → uniform price; perfect info → first-degree
discrimination
▶ question: what can we say about monopolist’s profit, consumer’s
surplus, and efficiency that is robust to monopolist’s information?
 Price Discrimination: Model
▶ one seller of homogeneous, indivisible good; marginal cost = 0

▶ unit mass of consumers, each demanding one unit

▶ Ω = {ω1 , . . . , ωK }: set of consumers’ possible valuations (ωk > 0)

▶ µ0 ∈ ∆(Ω): seller’s prior, i.e., µ0 (ωk ) share of ωk -consumers

▶ “market” is any µ ∈ ∆(Ω)

▶ a ∈ [0, ωK ]: monopolist’s price

▶ u(a, ωk ) = a1{a ≤ ωk }: monopolist’s profit function

▶ monopolist maximizes expected profits: letting ak = ωk for all k

∑
K
a(µ) = max ak µj
k=1,...,K
j=k
 Price Discrimination: Definitions

▶ segmentation:

▶ division of initial market into finitely many submarkets

▶ interpretation as info: signal s ∈ S from π = {π(·|ω)}ω∈Ω that revels
something about consumers in that market → µs ∈ ∆(Ω)
▶ equivalently, distribution over market compositions given µ0 :
∑
τ ∈ ∆(∆(Ω)) s.t. µτ (µ) = µ0
µ∈supp τ

▶ pricing rule: α : supp τ → ∆(Ω)

▶ α is optimal if every a ∈ supp α(µ) maximizes profits in µ-market

 Price Discrimination: Main Result
∑K
▶ maximal feasible surplus: W∗ = k=1ωk µ0 (ωk )
∑
▶ uniform-price profits: P∗ = a(µ0 ) µ0 (ωk )
{k:ωk ≥a(µ0 )}
∑
▶ uniform-price consumer surplus: U∗ = [ωk − a(µ0 )]µ0 (ωk )
{k:ωk ≥a(µ0 )}

Theorem. (Surplus Triangle) ∃τ and optimal α that induce consumer

surplus U and profits P if and only if U ≥ 0, P ≥ P∗ , and U + P ≤ W∗

Intuition (FIGURE):
▶ τ fully uninformative → P = P∗ and seller can always ignore info
▶ consumers’ individual rationality → U ≥ 0
▶ τ fully informative → perfect discrimination → U = 0, P = W∗
▶ suppose we can “get” (U, P) = (0, P∗ ) and (U, P) = (W∗ − P∗ , P∗ ).
The result follows by convexity of set of feasible τ s
 Price Discrimination: Main Result
▶ how to “get” (U, P) = (0, P∗ ) and (U, P) = (W∗ − P∗ , P∗ )?
▶ example:
(1 )
▶ Ω = {1, 2, 3}, µ0 = , 31 , 1
, a(µ0 ) = 2, W∗ = 2, P∗ = 34 , U∗ = 1
3 3 3
▶ segmentation
2 1 1
τ 3 6 6

Market µ1 µ2 µ3
1
ω1 = 1 2 0 0
1 1
ω2 = 2 6 3 1
1 2
ω3 = 3 3 3 0
▶ for all µ, seller indifferent between all ak ∈ supp µ
▶ 2 ∈ supp µ for all µ ⇒ P = 4 = P∗ by indifference
3
▶ α(µ) = min{supp µ} for all µ ⇒ U = W∗ − P∗
▶ α(µ) = max{supp µ} for all µ ⇒ U = 0
Persuasion as Changing Worldviews
 Persuasion as Changing Worldviews

▶ Bayesian persuasion: shrink set of possible worlds, refine belief

about a problem
▶ Sometimes persuaders have to induce listener to view world/problem
through new lens, or expand set of possible worlds (e.g., pioneering
scientists, visionary leaders, inventors)
▶ Issue: many people are resistant to change worldviews
▶ Questions:
▶ how to model this??
▶ what constraints does this impose on persuaders (̸= Bayes’ rule)?
▶ what trade-offs does this create for persuaders?
▶ what properties do optimal persuasion strategies have?
 A Model
▶ Single receiver of information (the agent)
▶ A: finite set of feasible actions
▶ Ω: finite set of states of the world
▶ u(a, ω): payoff function – non-trivial dependence on ω
▶ Single provider of information (the designer)
▶ v(a, ω): payoff function
▶ commits to signal/experiment/information structure {π(s|ω)}ω∈Ω
▶ call (s, π) a piece of evidence (note: objective meaning)
▶ Worldviews:
▶ designer’s prior σ ∈ ∆(Ω) with supp σ = Ω
▶ agent’s prior ρ ∈ ∆(Ω) with supp ρ = P ⊊ Ω. Interpretation: P is
set of “possible” states, I = Ω \ P is set of “impossible” states
▶ Changes of worldview: for every (s, π)
▶ if π(s|ω) > 0 for some ω ∈ P, (s, π) is “expected” for agent and
“confirms” ρ ⇒ update ρ using Bayes’ rule
▶ if π(s|ω) = 0 for all ω ∈ P, (s, π) is “unexpected” for agent and
“disproves” ρ ⇒ change prior to ρ1 with supp ρ1 = Ω ⇒ update ρ1
using Bayes’ rule
▶ note: changes are entirely driven by evidence
 Example: Climate-Change Denial
▶ Designer: renewable energy lobbyist. Agent: climate-change denier
▶ Ω = {h, H, t, T}:
▶ h: climate change is hoax, fossil fuels have minor health issues
▶ H: climate change is hoax, fossil fuels have severe health issues
▶ t: climate change is true, fossil fuels have minor health issues
▶ T: climate change is true, fossil fuels have severe health issues
▶ A = {ah , aH , at , aT }: policies affecting renewables profits (x > 1)

ω ρ σ Policy Profits
h 0.7 0.07 ah 1
H 0.3 0.03 aH 2
t 0 0.5 at 1.5
T 0 0.4 aT 3
Table: Worldviews Table: Policies and Profits

▶ u(aω , ω ′ ) = 1{ω=ω′ } and v(aω , ω) = profits

▶ new worldview: ρ1 = σ
 Feasible Posterior Beliefs

▶ let p(·|s, π) be agent’s posterior and q(·|s, π) be designer’s posterior

▶ every π induces a τ ∈ ∆(∆(Ω)) over q’s (and vice versa) s.t.

∑
qτ (q) = σ
q

Benchmark: ρ̂ ̸= σ but supp ρ̂ = supp σ = Ω (Alonso-Camara (’16))

Proposition. There exists b : ∆(Ω) → ∆(Ω) s.t.

ρ̂(ω)
q(ω) σ(ω)
b(ω; q) = ∑ ′
ρ̂(ω )
, ω∈Ω
ω ′ ∈Ω q(ω ′ ) σ(ω ′)
 Feasible Posterior Beliefs

▶ let p(·|s, π) be agent’s posterior and q(·|s, π) be designer’s posterior

▶ every π induces a τ ∈ ∆(∆(Ω)) over q’s (and vice versa) s.t.

∑
qτ (q) = σ
q

▶ let D = {q : supp q ⊆ I} = ∆(I) and C = ∆(Ω) \ D

Proposition. If (s, π) induces q, then it induces p = p(q) defined by

{
q(ω) r(ω;q)
σ(ω) ρ if q ∈ C
p(ω; q) = ∑ ′ ω ∈ Ω, where r(q) =
′ r(ω ;q)
ω ′ ∈Ω q(ω ) σ(ω ′ )
ρ1 if q ∈ D

Remark: enough to know Bayesian q to know non-Bayesian p

 Feasible Posterior Beliefs
Corollary. While b : ∆(Ω) → ∆(Ω) is continuous, onto, and one-to-
one, p : ∆(Ω) → ∆(Ω) has the following properties:
(1) Surprise: p is not continuous at the boundary between C and D
(2) Extremism: p(C) = ∆(P) and p(D) = ∆(I)
(3) Concealment: If q̂, q̃ ∈ C and q̂(·|P) = q̃(·|P), then p(q̂) = p(q̃)

t t

D C p(D)

H H

T T
p(C)

h h

(a) confirming and disproving posteriors (b) extremism

t t

Q H H

T T
p(Q) p(Q)
h h
(c) concealment (d) surprise
 Optimal Persuasion: Concavification

▶ letting v̂(q) = Eq [v(a(p(q)), ω)] for all q, designer’s problem is

∑
v∗ = sup Eτ [v̂(q)] s.t. qτ (q) = σ
q

▶ concavification is still valid: v∗ = V(σ)

 Optimal Concealment

How to optimally conceal ω ∈ I?

▶ define Ac = ∪p∈∆(P) {arg maxa∈A Ep [u(a, ω)]}
∑
▶ let Vc (σ) = sup Eτ [v̂(q)] s.t. q qτ (q) = σ and supp τ ⊆ C

Proposition. To find Vc (σ) it suffices to consider τ s.t.

(1) for q ∈ supp τ , q(ω) > 0 for at most one ω ∈ I
(2) for ω ∈ I, q(ω) > 0 for only one q ∈ supp τ
(3) if q ∈ supp τ and q(ω) > 0 for ω ∈ I, then
a(p(q)) ∈ arg maxc v(a, ω)
a∈A

(1) agent ignores ω ∈ supp q ∩ I anyway

(2) conceal each ω ∈ I only in piece of evidence yielding best action
(3) if q(ω) ≈ 1, chosen a irrelevant for ω ′ ̸= ω + can fully sway p ∈ ∆(P)
 Optimal Persuasion

▶ define opportunity cost of disproving the agent’s worldview

k̂(q) = Eq [maxc v(a, ω)], q∈D

a∈A

Proposition. It is optimal to disprove the agent’s worldview iff v̂(q) >

k̂(q) for some q ∈ D

▶ let M be concavification of m̂ = max{k̂, v̂} over D

Proposition. The designer’s best payoff satisfies

V(σ) = σ(P)V(σ(·|P)) + σ(I)M(σ(·|I))

▶ problem separable between possible and impossible states
▶ for P, do KG’s optimum from “prior” σ(·|P)
▶ for I, do KG’s optimum from “prior” σ(·|I) and function m̂
 Example: Climate-Change Denial (cont’d)
M(σ(·|I))
3 v̂
M
2 v̂ 2 k

V V(σ(·|P)) V
1.5

1
q(H|P) 0 4 0.5 1 q(T|I)
0 0.3 0.5 1 9

Figure: Confirming the agent Figure: Disproving the agent

τ∗ 0.04 0.06 0.1 0.8

Posterior q′ q′′ qc qd π ∗ (s|ω) s′ s′′ sd
4 3
h 1 0.5 0 0 h 7 7 0
H 0 0.5 0 0 H 0 1 0
1 4
t 0 0 1 0.5 t 0 5 5
T 0 0 0 0.5 T 0 0 1
Table: Optimal τ Table: Optimal π