Censorship as optimal persuasion

Abstract

Kolotilin acknowledges financial support from the Australian Research Council Discovery Early Career Research Award DE160100964 and from MIT Sloan's Program on Innovation in Markets and Organizations. Mylovanov acknowledges financial support from the Office of Naval Research Multidisciplinary University Research Initiative Award N0001417-1-2675 and from Kyiv School of Economics. Zapechelnyuk acknowledges financial support from the Economic and Social Research Council Grant ES/N01829X/1. ; We consider a Bayesian persuasion problem where a sender's utility depends only on the expected state. We show that upper censorship that pools the states above a cutoff and reveals the states below the cutoff is optimal for all prior distributions of the state if and only if the sender's marginal utility is quasi‐concave. Moreover, we show that it is optimal to reveal less information if the sender becomes more risk averse or the sender's utility shifts to the left. Finally, we apply our results to the problem of media censorship by a government. ; Publisher PDF ; Peer reviewed