Withholding Verifiable Information

TL;DR

This paper analyzes finite-action disclosure games, revealing how equilibrium payoffs can be achieved through structured pooling strategies and exploring conditions where commitment offers no advantage.

Contribution

It introduces a laminar partition structure for disclosure strategies and characterizes when commitment power is unnecessary for the sender.

Findings

Equilibrium payoffs can be achieved with laminar partition strategies.

Sender does not benefit from commitment under certain conditions.

Application to selling with quality disclosure and voter influence.

Abstract

We study a class of finite-action disclosure games in which the sender's preferences are state-independent and the receiver's optimal action depends only on the expected state. While receiver-preferred equilibria in these games involve full revelation, other equilibria are less well understood. We show that any equilibrium payoff can be obtained with a disclosure strategy corresponding to a partition with a laminar structure that allows pooling of nonadjacent states. In a sender-preferred equilibrium, such a structure balances inducing more sender-favorable actions with deterring deviations. Leveraging this insight, we identify conditions under which the sender does not benefit from commitment power. We then apply these results to study selling with quality disclosure and influencing voters.