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Reselling Information

Author

Listed:
  • S. Nageeb Ali
  • Ayal Chen-Zion
  • Erik Lillethun

Abstract

Information is replicable in that it can be simultaneously consumed and sold to others. We study how resale affects a decentralized market for information. We show that even if the initial seller is an informational monopolist, she captures non-trivial rents from at most a single buyer: her payoffs converge to 0 as soon as a single buyer has bought information. By contrast, if the seller can also sell valueless tokens, there exists a ``prepay equilibrium'' where payment is extracted from all buyers before the information good is released. By exploiting resale possibilities, this prepay equilibrium gives the seller as high a payoff as she would achieve if resale were prohibited.

Suggested Citation

  • S. Nageeb Ali & Ayal Chen-Zion & Erik Lillethun, 2020. "Reselling Information," Papers 2004.01788, arXiv.org, revised Dec 2022.
    • Handle: RePEc:arx:papers:2004.01788
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    References listed on IDEAS

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    1. Charles I. Jones & Christopher Tonetti, 2020. "Nonrivalry and the Economics of Data," American Economic Review, American Economic Association, vol. 110(9), pages 2819-2858, September.

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    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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