Competition in Information Disclosure

Abstract

We analyze a model of competition in Bayesian persuasion in which two or more senders vie for the patronage of a receiver by disclosing information about their respective proposals. Our main analysis focuses on the case of binary state space, i.e., each sender's product gives the receiver either a high or low utility. With two (possibly asymmetric) senders, we fully characterize the generically unique equilibrium, and show that it has a simple linear structure similar to that of all-pay auction with complete information. We find that a sender that faces a stronger opponent engages in more aggressive disclosure in the sense of second-order stochastic dominance. With multiple symmetric senders, the existence of a unique symmetric equilibrium is established and characterized. We show that an increase in the number of competing senders leads to a more aggressive disclosure. In the limit as the number of senders goes to infinity, all senders engage in full disclosure. Lastly, we show that the finding that equilibrium strategy must respect a linear structure remains valid locally for every finite state space.