Theory seminar presented by Ina Taneva (University of Edinburgh)

Abstract: The way information allocates knowledge in a group affects its implementation. Are there information structures with desirable implementation properties that are optimal in a wide range of environments? We study this question as a standard information design problem, but emphasize the organizational characteristics of optimal disclosure. We propose the notions of a single-meeting scheme and of a decentralizable information hierarchy to capture notions of “easier”, or less costly, implementation. Decentralization relies on partitioning agents into groups which are ranked by how informed they are in a strong sense, so that information can flow down the hierarchy after communicating once with the group at the top. Our results establish a connection between implementation and strategic complementarities, showing conditions under which single-meeting schemes and decentralizable information hierarchies are optimal in binary-action environments. We apply our results to a regimechange framework and outline the effects which determine the agents’ ranks in the information hierarchy.