Work

On the Optimality of Full Disclosure

Year: 2025

Type: article

Abstract: ABSTRACT A privately informed sender can commit to any disclosure policy toward a receiver, whose actions affect the utility of the sender. We show that full disclosure is optimal under a sufficient condition with some desirable properties. First, it speaks directly to the parties' utility functions, as opposed to the sender's indirect utility function; this makes it easily interpretable and verifiable. Second, it does not require the sender's payoff to be a function of the posterior mean state. Third, it is weaker than the conditions obtained in the literature for some specific settings.

Source: The RAND Journal of Economics

DOI: 10.1111/1756-2171.70013

Authors: Emiliano Catonini, Sergey Stepanov

Institutions: New York University Shanghai, National Research University Higher School of Economics

Language: English

Topic: Game Theory and Applications

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: bronze

Funders: National Natural Science Foundation of China, National Research University Higher School of Economics