Dynamic Information Design under Constrained Communication Rules

An information designer wishes to persuade agents to invest in a project of unknown quality. To do so, she must induce investment and collect feedback from these investments. Motivated by data reg-ulations and simplicity concerns, our designer faces communica-tion constraints. These constraints hinder her without benefiting the agents: they impose an upper bound on the induced belief spread, limiting persuasion. Nevertheless, two-rating systems (direct recom-mendations) are the optimal design when experimentation is needed to generate information and approximate the designer's first-best payoff for specific feedback structures. When the designer has altruistic motives, constrained rules significantly decrease welfare.