Persuasion by Dimension Reduction

@article{Malamud2021PersuasionBD,
  title={Persuasion by Dimension Reduction},
  author={Semyon Malamud and Andreas Schrimpf},
  journal={Human Behavior \& Game Theory eJournal},
  year={2021}
}
  • S. Malamud, Andreas Schrimpf
  • Published 17 October 2021
  • Computer Science, Mathematics, Economics
  • Human Behavior & Game Theory eJournal
How should an agent (the sender) observing multi-dimensional data (the state vector) persuade another agent to take the desired action? We show that it is always optimal for the sender to perform a (non-linear) dimension reduction by projecting the state vector onto a lower-dimensional object that we call the "optimal information manifold." We characterize geometric properties of this manifold and link them to the sender's preferences. Optimal policy splits information into "good" and "bad…