Open AccessOptimal information disclosure: A linear programming approach
Author(s) -
Kolotilin Anton
Publication year - 2018
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te1805
Subject(s) - communication source , private information retrieval , computer science , monotonic function , interval (graph theory) , linear programming , mechanism design , type (biology) , information asymmetry , mathematical economics , mathematical optimization , microeconomics , computer security , mathematics , algorithm , economics , computer network , mathematical analysis , ecology , combinatorics , biology
An uninformed sender designs a mechanism that discloses information about her type to a privately informed receiver, who then decides whether to act. I impose a single‐crossing assumption, so that the receiver with a higher type is more willing to act. Using a linear programming approach, I characterize optimal information disclosure and provide conditions under which full and no revelation are optimal. Assuming further that the sender's utility depends only on the sender's expected type, I provide conditions under which interval revelation is optimal. Finally, I show that the expected utilities are not monotonic in the precision of the receiver's private information.