Adversarial Coordination and Public Information Design

We study flexible public information design in global games. In addition to receiving public information from the designer, agents are endowed with exogenous private information and must decide whether or not to “attack” a status-quo. The designer does not trust the agents to play favourably to her and evaluates any policy under the “worst-case scenario.” First, we show that the optimal policy removes any strategic uncertainty by inducing all agents to take the same action, but without permitting them to perfectly learn the fundamentals or the beliefs that rationalize other agents' actions. Second, we identify conditions under which the optimal policy takes the form of a simple pass/fail test. Finally, we show that, when the designer cares only about the probability of regime change, the optimal policy need not be monotone in fundamentals but then identify conditions on payoffs and exogenous beliefs under which the optimal policy is monotone