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. We show that communication in this dynamic environment is drastically different from in a one-shot game. Our main result is that full information revelation is possible. We provide a constructive method to build such fully revealing equilibria, and show that complicated communication, where far-away types pool together, allows dynamic manipulation of beliefs to enable better information release in the future. If communication is restricted to be monotonic partitional, full revelation is impossible. Finally, we show how conditioning future information release on past actions improves incentives for information revelation.