Research / BFI Working PaperMar 14, 2022

Allocating Scarce Information

Richard T. Holden, Anup Malani, Chris Teh

Sender conveys scarce information to a number of receivers to maximize the sum of receiver payoffs. Each receiver’s payoff depends on the state of the world and an action she takes. The optimal action is state contingent. Under mild regularity conditions, we show that the payoff of each receiver is convex in the amount of information she receives. Thus, it is optimal for Sender to target information to a single receiver. We then study four extensions in which interior information allocations are optimal.

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