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Entropy-Regularized Optimal Transport in Information Design

  • Jorge Justiniano
  • , Andreas Kleiner
  • , Benny Moldovanu
  • , Martin Rumpf
  • , Philipp Strack
  • University of Bonn
  • Yale University

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

In this paper, we explore a scenario where a sender provides an information policy and a receiver, upon observing a realization of this policy, decides whether to take a particular action, such as making a purchase. The sender's objective is to maximize her utility derived from the receiver's action, and she achieves this by careful selection of the information policy. Building on the work of Kleiner et al., our focus lies specifically on information policies that are associated with power diagram partitions of the underlying domain. To address this problem, we employ entropy-regularized optimal transport, which enables us to develop an efficient algorithm for finding the optimal solution. We present experimental numerical results that highlight the qualitative properties of the optimal configurations, providing valuable insights into their structure. Furthermore, we extend our numerical investigation to derive optimal information policies for monopolists dealing with multiple products, where the sender discloses information about product qualities.

Original languageEnglish
Title of host publicationEC 2025 - Proceedings of the 26th ACM Conference on Economics and Computation
PublisherAssociation for Computing Machinery, Inc
Pages741-760
Number of pages20
ISBN (Electronic)9798400719431
DOIs
StatePublished - 2 Jul 2025
Externally publishedYes
Event26th ACM Conference on Economics and Computation, EC 2025 - Stanford, United States
Duration: 7 Jul 202510 Jul 2025

Publication series

NameEC 2025 - Proceedings of the 26th ACM Conference on Economics and Computation

Conference

Conference26th ACM Conference on Economics and Computation, EC 2025
Country/TerritoryUnited States
CityStanford
Period7/07/2510/07/25

Keywords

  • entropy-regularization
  • information design
  • moment Bayesian persuasion
  • monopolist problem
  • optimal transport

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