Information Design With Frame Choice

Decision-makers often rely on coarse categories that lump distinct contingencies together. We study how such framing interacts with information design. Sender distinguishes all contingencies, whereas Receiver reasons within a coarse frame that pools some of them. Sender first decides whether to disclose context that refines Receiver’s frame and then designs an information structure. The coarse frame lets Sender conceal parts of the information structure; reframing unpacks pooled contingencies, prompting Receiver to revise prior beliefs and payoffs and thereby reshaping persuasion possibilities. We characterize this trade-off and show that reframing can benefit Sender by either expanding the scope for persuasion or making persuasion unnecessary. Relative to classical Bayesian persuasion, Receiver’s frame becomes a novel determinant of the optimal information structure, alongside prior beliefs and payoffs. Finally, although a coarse frame may expose Receiver to exploitation, reframing can enable more effective persuasion and leave her worse off; protecting Receiver may thus require prohibiting rather than mandating disclosure. Our results inform disclosure and communication in financial advice, product labeling, ratings, test design, and consumer protection.

Evsyukova, Yulia, Federico Innocenti and Niccolò Lomys (2024), Information Design With Frame Choice, ZEW Discussion Paper No. 24-084, Mannheim.