Information Design with Elicitation and Strategic Coordination
Provides a theoretical framework for optimal information design in strategic settings, relevant for economists and mechanism designers.
The paper characterizes optimal information design mechanisms for linear-quadratic games with Gaussian uncertainty, showing that optimal mechanisms maximally correlate or anticorrelate actions depending on strategic complementarity or substitutability, and remain partially revealing under large type uncertainty.
We study linear-quadratic games of incomplete information with Gaussian uncertainty, where each player's payoff depends on a privately observed type and a common state. The designer observes the state, elicits types, and sells action recommendations. We characterize all implementable mechanisms with Gaussian joint distributions of actions and fundamentals, and identify the players-optimal, consumer-optimal, and revenue-maximizing designs. In games of strategic complements (substitutes), these optimal mechanisms maximally correlate (anticorrelate) players' actions. When type uncertainty is large, recommendations become deterministic linear functions of the state and reports, but remain only partially revealing.