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Selling Information

Listed author(s):
  • Johannes Hörner
  • Andrzej Skrzypacz

A firm considers hiring an agent who may be competent for a potential project or not. The agent can prove her competence but faces a holdup problem. We propose a model of persuasion and show how gradualism helps mitigate the holdup problem. We show when it is optimal to give away part of the information at the beginning of the bargaining and sell the remainder in dribs and drabs. The agent can appropriate only part of the value of information. Introducing a third party allows her to extract the maximum surplus.

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File URL: http://dx.doi.org/10.1086/688874
Download Restriction: Access to the online full text or PDF requires a subscription.

File URL: http://dx.doi.org/10.1086/688874
Download Restriction: Access to the online full text or PDF requires a subscription.

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Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 124 (2016)
Issue (Month): 6 ()
Pages: 1515-1562

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Handle: RePEc:ucp:jpolec:doi:10.1086/688874
Contact details of provider: Web page: http://www.journals.uchicago.edu/JPE/

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  1. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 327-358.
  2. Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2013. "Strategic information exchange," Games and Economic Behavior, Elsevier, vol. 82(C), pages 444-467.
  3. Gul, Faruk, 2001. "Unobservable Investment and the Hold-Up Problem," Econometrica, Econometric Society, vol. 69(2), pages 343-376, March.
  4. Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476, July.
  5. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
  6. Yeon-Koo Che & József Sákovics, 2004. "A Dynamic Theory of Holdup," Econometrica, Econometric Society, vol. 72(4), pages 1063-1103, 07.
  7. Forges, Françoise & Koessler, Frédéric, 2008. "Long persuasion games," Journal of Economic Theory, Elsevier, vol. 143(1), pages 1-35, November.
  8. Landsberger, Michael & Meilijson, Isaac, 1990. "Lotteries, insurance, and star-shaped utility functions," Journal of Economic Theory, Elsevier, vol. 52(1), pages 1-17, October.
  9. James J. Anton & Dennis A. Yao, 2002. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 513-531.
  10. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 259-276.
  11. Robert J. Aumann & Sergiu Hart, 2003. "Long Cheap Talk," Econometrica, Econometric Society, vol. 71(6), pages 1619-1660, November.
    • Robert J. Aumann & Sergiu Hart, 2002. "Long Cheap Talk," Discussion Paper Series dp284, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem, revised Nov 2002.
  12. Admati, Anat R & Pfleiderer, Paul, 1988. "Selling and Trading on Information in Financial Markets," American Economic Review, American Economic Association, vol. 78(2), pages 96-103, May.
  13. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, July.
  14. repec:dau:papers:123456789/179 is not listed on IDEAS
  15. Françoise Forges, 1990. "Equilibria with Communication in a Job Market Example," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 375-398.
  16. Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 345-364.
  17. Olivier Compte & Philippe Jehiel, 2004. "Gradualism in Bargaining and Contribution Games," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 975-1000.
  18. Admati, Anat R & Pfleiderer, Paul, 1990. "Direct and Indirect Sale of Information," Econometrica, Econometric Society, vol. 58(4), pages 901-928, July.
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