On Informational Nudging for Boundedly Rational Decision Makers

We consider the problem of informational nudge design (i.e., the strategic revelation of possibly altered information) for a boundedly rational decision-maker facing choices at every time instant. Bounded rationality manifests itself through the presence of a belief vector, which influences how provided information is used and which itself varies dynamically (possibly in a self-reinforcing, yet unwarranted way), depending on the decision maker's best response. We show that an arbitrary mixed-strategy equilibrium point can be created and stabilized given if the belief's update is slow enough and demonstrates adequate level of non-compliance to revealed information.