Dynamic Strategic Information Transmission

Abstract

This paper studies strategic information transmission in a finite horizon environment where, each period, a privately informed expert sends a message and a decision maker takes an action. Our main contribution is to show that communication in this dynamic environment is drastically different from the canonical static environment. First, full revelation is possible. We provide a con- structive method to build such an equilibrium. Second, we show that complicated communication, where far-away types pool, allows dynamic manipulation of beliefs and enables better information release in the future. If communication is restricted to be simple, such as monotonic partitional, full revelation is impossible. Thirdly, we show that conditioning future information release on past actions improves incentives and information release.