Experimental design to persuade

A sender chooses ex ante how her information will be disclosed ex post. A receiver obtains public information and information disclosed by the sender. Then he takes one of two actions. The sender wishes to maximize the probability that the receiver takes the desired action. I show that the sender optimally discloses only whether the receiver’s utility is above a cuto¤, which makes the receiver indi¤erent between the two actions upon learning that his utility is above it. I derive necessary and su¢ cient conditions for the sender’s and receiver’s welfare to be monotonic in information. Most notably, the sender’s welfare increases and the receiver’s welfare does not change with the precision of the sender’s information. Moreover, the sender’s welfare decreases and the receiver’s welfare increases with the precision of public information. JEL Classi…cation: C44, D81, D82, D83