Events at CERGE-EI

Tuesday, 11 February, 2020 | 15:00 | Micro Theory Research Seminar

Gabriel Ziegler (Job Talk) “Adversarial Bilateral Information Design”

Gabriel Ziegler

Northwestern University, Evanston, Illinois, USA

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Author: Gabriel Ziegler

Abstract: Information provision is a significant component of business-to-business interaction. Furthermore, the provision of information is often conducted bilaterally. This precludes the possibility of commitment to a grand information structure if there are multiple receivers. Consequently, in a strategic situation, each receiver needs to reason about what information other receivers get. Since the information provider does not know this reasoning process, a motivation for a robustness requirement arises: the provider seeks an information structure that performs well no matter how the receivers actually reason. In this paper, I provide a general method to study how to optimally provide information under these constraints. The main result is a representation theorem, which relies in particular on novel bounds on the correlation among receivers’ beliefs. I illustrate the main result by solving for the optimal provision of information in a stylized model of contract research organizations, which are an integral part of the pharmaceutical industry.

Keywords: bilateral contracting, information design, robust design, adversarial design, belief manipulation, belief distributions, Bayes plausibility, Fréchet-Hoeffding bounds, dependence bounds.

JEL Classification: C72, D82, D83, L86.
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Full Text: “Adversarial Bilateral Information Design”