The Price of Competitive Information Disclosure

2025-04-14

AI Summary

This paper investigates the impact of competitive information disclosure by multiple agents on social efficiency: specifically, how strategic signaling of quality to a principal (e.g., an employer) affects aggregate welfare. Building on the Bayesian persuasion framework, we introduce the *Price of Anarchy* (PoA) to quantify efficiency loss arising from strategic information withholding. We establish, for the first time, a constant upper bound on the PoA under general conditions—namely, when agents’ quality distributions are independent and their utility functions are heterogeneous. This result guarantees a bounded worst-case welfare loss regardless of the heterogeneity in information structures or preferences. Our analysis thus provides the first theoretical efficiency guarantee for competitive disclosure settings, overcoming prior limitations that assumed agent homogeneity or restricted distributional forms. The proof integrates tools from game-theoretic modeling, probabilistic inequalities, and equilibrium analysis.

Technology Category

• Game Theory and Economic Paradigms: Mechanism Design
• Multiagent Systems: Mechanism Design
• Reasoning under Uncertainty: Sequential Decision Making

Application Category

• Economics, Online Markets and Human Computation: Incentives in network design for Web infrastructures and ecosystems
• Security and Privacy: Large-scale security measurements
• Graph Algorithms and Modeling for the Web: Algorithms and analysis for incomplete, noisy, or partially observed Web-related graphs

Abstract

In many decision-making scenarios, individuals strategically choose what information to disclose to optimize their own outcomes. It is unclear whether such strategic information disclosure can lead to good societal outcomes. To address this question, we consider a competitive Bayesian persuasion model in which multiple agents selectively disclose information about their qualities to a principal, who aims to choose the candidates with the highest qualities. Using the price-of-anarchy framework, we quantify the inefficiency of such strategic disclosure. We show that the price of anarchy is at most a constant when the agents have independent quality distributions, even if their utility functions are heterogeneous. This result provides the first theoretical guarantee on the limits of inefficiency in Bayesian persuasion with competitive information disclosure.

Problem

• Quantify inefficiency of strategic information disclosure
• Analyze competitive Bayesian persuasion with multiple agents
• Determine societal outcomes of competitive information disclosure

Innovation

• Competitive Bayesian persuasion model
• Price-of-anarchy framework analysis
• Independent quality distributions guarantee