Reaping the Informational Surplus in Bayesian Persuasion

TL;DR

This paper analyzes a multi-sender Bayesian persuasion model where the receiver can choose among senders, showing that even slight uncertainty among senders allows the receiver to extract all informational surplus in equilibrium.

Contribution

It introduces a multi-sender Bayesian persuasion framework with sender choice, revealing that uncertainty among senders enables full surplus extraction by the receiver.

Findings

Receiver obtains all informational surplus when senders have uncertain preferences.

Equilibria ensure maximal surplus extraction under slight preference uncertainty.

The model extends Bayesian persuasion to multi-sender scenarios with sender choice.

Abstract

The Bayesian persuasion model studies communication between an informed sender and a receiver with a payoff-relevant action, emphasizing the ability of a sender to extract maximal surplus from his informational advantage. In this paper we study a setting with multiple senders, but in which the receiver interacts with only one sender of his choice: senders commit to signals and the receiver then chooses, at the interim stage, with which sender to interact. Our main result is that whenever senders are even slightly uncertain about each other's preferences, the receiver receives all the informational surplus in all equilibria of this game.