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Brownbag Seminars: Transparency and Symmetry: information as a bargaining solution

Seminar
arseniy
Wednesday, October 5, 2022, 12:00 pm – 1:00 pm

Abstract: We model situations in which actors with diverse interests decide how and whether to disclose information. Such scenarios occur when parties compete as a coalition against a joint opponent, authoritarian elites choose the level of government transparency, or firms collectively lobby a regulator. We follow a Bayesian persuasion approach in which actors can commit to a way of providing information, say, through a coordinated campaign or control of the media. Our first result is that when actors are similar and have enough gains to share, they can agree on a form of information disclosure that benefits all of them. Imposing stronger symmetry assumptions leads to full disclosure of the truth whenever this brings the highest possible benefit to an individual actor. Our interpretation of the results is that transparency arises in competitive environments, like multiparty democracies, autocracies where powerful elites oppose the leader, or industries where firms are similar.