DP16959 Organized Information Transmission

Author(s): Laurent Mathevet, Ina Taneva
Publication Date: January 2022
Date Revised: January 2022
Keyword(s): Bayes correlated equilibrium, delegated transmission, incomplete information, information design
JEL(s): C72, D82, D83
Programme Areas: Organizational Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16959

We formalize the concepts of horizontal and vertical information transmission and introduce two families of information structures, namely single-meeting schemes and delegated hierarchies, that specialize along these dimensions. We characterize the strategic outcomes that they implement in general finite incomplete information games and illustrate the resulting linear programming approach in a linear network example. We build on the characterizations to show that these families are unconstraine-doptimal in binary-action games with strategic complementarities. Finally, we generalize these families to multiple meetings and random hierarchies and characterize the corresponding strategic outcomes.