  Strategic information design is a framework where a sender designs
information strategically to steer its receiver's decision towards a desired
choice. Traditionally, such frameworks have always assumed that the sender and
the receiver comprehends the state of the choice environment, and that the
receiver always trusts the sender's signal. This paper deviates from these
assumptions and re-investigates strategic information design in the presence of
distrustful receiver and when both sender and receiver cannot
observe/comprehend the environment state space. Specifically, we assume that
both sender and receiver has access to non-identical beliefs about choice
rewards (with sender's belief being more accurate), but not the environment
state that determines these rewards. Furthermore, given that the receiver does
not trust the sender, we also assume that the receiver updates its prior in a
non-Bayesian manner. We evaluate the Stackelberg equilibrium and investigate
effects of information framing (i.e. send complete signal, or just expected
value of the signal) on the equilibrium. Furthermore, we also investigate trust
dynamics at the receiver, under the assumption that the receiver minimizes
regret in hindsight. Simulation results are presented to illustrate signaling
effects and trust dynamics in strategic information design.
