Persuasion Meets Delegation
Anton Kolotilin, Andriy Zapechelnyuk
TL;DR
This paper demonstrates the fundamental equivalence between persuasion and delegation problems, using persuasion tools to extend delegation theory and address new issues like monopoly regulation with participation constraints.
Contribution
It establishes the equivalence between persuasion and delegation problems and applies persuasion techniques to expand delegation theory and solve novel regulatory issues.
Findings
Persuasion and delegation problems are generally equivalent.
Tools from persuasion literature can extend delegation results.
Addresses new delegation issues like monopoly regulation with participation constraints.
Abstract
A principal can restrict an agent's information (the persuasion problem) or restrict an agent's discretion (the delegation problem). We show that these problems are generally equivalent - solving one solves the other. We use tools from the persuasion literature to generalize and extend many results in the delegation literature, as well as to address novel delegation problems, such as monopoly regulation with a participation constraint.
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Taxonomy
TopicsGame Theory and Voting Systems · Game Theory and Applications · Auction Theory and Applications