Limiting Sender's information in Bayesian persuasion

Abstract

I study how the outcome of Bayesian persuasion depends on Sender's information. I consider a game in which, prior to Sender's information disclosure, Designer can restrict the most informative signal that Sender can generate. In the binary action case, I consider arbitrary preferences of Designer and characterize all equilibrium outcomes. As a corollary, I derive an information restriction that maximizes Receiver's payoffs: Whenever Designer can increase Receiver's payoffs by restricting Sender's information, the Receiver-optimal way coincides with an equilibrium of a hypothetical game in which Receiver persuades Sender.