Optimal Testing in Disclosure Games

Avi Lichtig () and Helene Mass ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We extend the standard disclosure model between a sender and a receiver by allowing the receiver to independently gather partial information, by means of a test – a signal with at most k realizations. The receiver’s choice of test is observed by the sender and therefore influences his decision of whether to disclose. We characterize the optimal test for the receiver and show how it resolves the trade-off between informativeness and disclosure incentives. If the receiver were aiming at maximizing the informativeness, she would choose a deterministic test. In contrast, the optimal test involves randomization over signal realizations and maintains a simple structure. Such a structure allows us to interpret this randomization as the strategic use of uncertain evaluation standards for disclosure incentives.

Keywords: Disclosure; Information Acquisition (search for similar items in EconPapers)
JEL-codes: D82 D83 (search for similar items in EconPapers)
Pages: 56
Date: 2024-05
New Economics Papers: this item is included in nep-dcm, nep-gth and nep-mic
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