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The Value Of Private Information In Monopoly

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  • ALEXANDER E. SAAK

Abstract

We investigate a basic question about a monopoly with incomplete information: when does the seller have an incentive to allow potential buyers to acquire more private information about their tastes for the seller's product? Under plausible conditions such as log‐concave density of willingness‐to‐pay and convex marginal cost, the seller prefers that the paying customers be well informed as a group but be left in the dark regarding their individual tastes.

Suggested Citation

  • Alexander E. Saak, 2008. "The Value Of Private Information In Monopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 169-189, March.
    • Handle: RePEc:bla:jindec:v:56:y:2008:i:1:p:169-189
    DOI: 10.1111/j.1467-6451.2008.00337.x
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    References listed on IDEAS

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    1. Juan José Ganuza & José S. Penalva, 2006. "On information and competition in private value auctions," Economics Working Papers 937, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2006.
    2. Athey, Susan & Levin, Jonathan, 2018. "The value of information in monotone decision problems," Research in Economics, Elsevier, vol. 72(1), pages 101-116.
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    Cited by:

    1. H. Müge Yayla‐Küllü & Jennifer K. Ryan & Jayashankar M. Swaminathan, 2021. "Product Line Flexibility for Agile and Adaptable Operations," Production and Operations Management, Production and Operations Management Society, vol. 30(3), pages 725-737, March.
    2. Alexander E. Saak, 2012. "Dynamic Informative Advertising of New Experience Goods," Journal of Industrial Economics, Wiley Blackwell, vol. 60(1), pages 104-135, March.
    3. Saak, Alexander E., 2016. "Optimal provision of information about consumption choices in the presence of a cognitive constraint," Economics Letters, Elsevier, vol. 145(C), pages 25-28.
    4. Alexander E. Saak, 2011. "A Model of Labeling with Horizontal Differentiation and Cost Variability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 1131-1150.
    5. Hoffmann, Florian & Inderst, Roman, 2011. "Pre-sale information," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2333-2355.

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