Conveying value via categories

• 成果类型: Article
• 署名作者: Onuchic, Paula; Ray, Debraj
• 署名单位: University of Oxford; New York University; University of Warwick
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE5026
• 发表日期: 2023-11-01
• 页码: 1407-1439
• 关键词: Monotonic categorization; heterogeneous priors; information design; D82; D83

摘要

A sender sells an object of unknown quality to a receiver who pays his expected value for it. Sender and receiver might hold different priors over quality. The sender commits to a monotone categorization of quality. We characterize the sender's optimal monotone categorization, the optimality of full pooling or full separation, and make precise a sense in which pooling is dominant relative to separation. As an application, we study the design of a grading scheme by an educational institution that seeks to signal student qualities and simultaneously incentivize students to learn. We show how these incentive constraints are embedded as a distortion of the school's prior over student qualities, generating a monotone categorization problem with distinct sender and receiver priors.