IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2602.01066.html

Simple and Robust Quality Disclosure: The Power of Quantile Partition

Author

Listed:
  • Shipra Agrawal
  • Yiding Feng
  • Wei Tang

Abstract

Quality information on online platforms is often conveyed through simple, percentile-based badges and tiers that remain stable across different market environments. Motivated by this empirical evidence, we study robust quality disclosure in a market where a platform commits to a public disclosure policy mapping the seller's product quality into a signal, and the seller subsequently sets a downstream monopoly price. Buyers have heterogeneous private types and valuations that are linear in quality. We evaluate a disclosure policy via a minimax competitive ratio: its worst-case revenue relative to the Bayesian-optimal disclosure-and-pricing benchmark, uniformly over all prior quality distributions, type distributions, and admissible valuations. Our main results provide a sharp theoretical justification for quantile-partition disclosure. For K-quantile partition policies, we fully characterize the robust optimum: the optimal worst-case ratio is pinned down by a one-dimensional fixed-point equation and the optimal thresholds follow a backward recursion. We also give an explicit formula for the robust ratio of any quantile partition as a simple "max-over-bins" expression, which explains why the robust-optimal partition allocates finer resolution to upper quantiles and yields tight guarantees such as 1 + 1/K for uniform percentile buckets. In contrast, we show a robustness limit for finite-signal monotone (quality-threshold) partitions, which cannot beat a factor-2 approximation. Technically, our analysis reduces the robust quality disclosure to a robust disclosure design program by establishing a tight functional characterization of all feasible indirect revenue functions.

Suggested Citation

  • Shipra Agrawal & Yiding Feng & Wei Tang, 2026. "Simple and Robust Quality Disclosure: The Power of Quantile Partition," Papers 2602.01066, arXiv.org.
  • Handle: RePEc:arx:papers:2602.01066
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2602.01066
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Babichenko, Yakov & Talgam-Cohen, Inbal & Xu, Haifeng & Zabarnyi, Konstantin, 2022. "Regret-minimizing Bayesian persuasion," Games and Economic Behavior, Elsevier, vol. 136(C), pages 226-248.
    2. Ce Li & Tao Lin, 2024. "Information Design with Unknown Prior," Papers 2410.05533, arXiv.org, revised Sep 2025.
    3. Onuchic, Paula & Ray, Debraj, 2023. "Conveying value via categories," Theoretical Economics, Econometric Society, vol. 18(4), November.
    4. S Nageeb Ali & Nima Haghpanah & Xiao Lin & Ron Siegel, 2022. "How to Sell Hard Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 619-678.
    5. Kosterina, Svetlana, 2022. "Persuasion with unknown beliefs," Theoretical Economics, Econometric Society, vol. 17(3), July.
    6. Marco Ottaviani & Andrea Prat, 2001. "The Value of Public Information in Monopoly," Econometrica, Econometric Society, vol. 69(6), pages 1673-1683, November.
    7. Hao Li & Xianwen Shi, 2017. "Discriminatory Information Disclosure," American Economic Review, American Economic Association, vol. 107(11), pages 3363-3385, November.
    8. Kolotilin, Anton & Mylovanov, Timofiy & Zapechelnyuk, Andriy, 2022. "Censorship as optimal persuasion," Theoretical Economics, Econometric Society, vol. 17(2), May.
    9. You Zu & Krishnamurthy Iyer & Haifeng Xu, 2025. "Learning to Persuade on the Fly: Robustness Against Ignorance," Operations Research, INFORMS, vol. 73(1), pages 194-208, January.
    10. Davide Crapis & Bar Ifrach & Costis Maglaras & Marco Scarsini, 2017. "Monopoly Pricing in the Presence of Social Learning," Management Science, INFORMS, vol. 63(11), pages 3586-3608, November.
    11. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    12. Guo, Yingni & Hao, Li & Shi, Xianwen, 2025. "Optimal discriminatory disclosure," Journal of Economic Theory, Elsevier, vol. 224(C).
    13. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    14. Yiding Feng & Yaonan Jin, 2024. "Beyond Regularity: Simple versus Optimal Mechanisms, Revisited," Papers 2411.03583, arXiv.org.
    15. Bar Ifrach & Costis Maglaras & Marco Scarsini & Anna Zseleva, 2019. "Bayesian Social Learning from Consumer Reviews," Operations Research, INFORMS, vol. 67(5), pages 1209-1221, September.
    16. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    17. Luis Rayo & Ilya Segal, 2010. "Optimal Information Disclosure," Journal of Political Economy, University of Chicago Press, vol. 118(5), pages 949-987.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dau:papers:123456789/12406 is not listed on IDEAS
    2. Xinyan Shi, 2013. "Information disclosure and vaccination externalities," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(3), pages 229-243, September.
    3. Rosar, Frank, 2017. "Test design under voluntary participation," Games and Economic Behavior, Elsevier, vol. 104(C), pages 632-655.
    4. Onuchic, Paula, 2025. "Advisors with hidden motives," Games and Economic Behavior, Elsevier, vol. 153(C), pages 431-450.
    5. Joanna Franaszek, 2021. "When Competence Hurts: Revelation of Complex Information," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 5-23.
    6. Cyrus Aghamolla & Carlos Corona & Ronghuo Zheng, 2021. "No reliance on guidance: counter‐signaling in management forecasts," RAND Journal of Economics, RAND Corporation, vol. 52(1), pages 207-245, March.
    7. Maxim Senkov & Toygar T. Kerman, 2024. "Changing Simplistic Worldviews," Papers 2401.02867, arXiv.org.
    8. Matthew Gentzkow & Emir Kamenica, 2011. "Competition in Persuasion," NBER Working Papers 17436, National Bureau of Economic Research, Inc.
    9. Florian Hoffmann & Roman Inderst & Marco Ottaviani, 2013. "Hypertargeting, Limited Attention, and Privacy: Implications for Marketing and Campaigning," Working Papers 479, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    10. Asriyan, Vladimir & Foarta, Dana & Vanasco, Victoria, 2018. "Strategic Complexity When Seeking Approval," Research Papers 3615, Stanford University, Graduate School of Business.
    11. Jeremy Bertomeu & Davide Cianciaruso, 2018. "Verifiable disclosure," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 1011-1044, June.
    12. Levent Celik, 2014. "Information Unraveling Revisited: Disclosure of Horizontal Attributes," Journal of Industrial Economics, Wiley Blackwell, vol. 62(1), pages 113-136, March.
    13. Arianna Degan & Ming Li, 2021. "Persuasion with costly precision," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 869-908, October.
    14. Kolotilin, Anton & Li, Hongyi, 2021. "Relational communication," Theoretical Economics, Econometric Society, vol. 16(4), November.
    15. repec:spo:wpmain:info:hdl:2441/17ekir5v8r8l6qbj0nnrfv4k2h is not listed on IDEAS
    16. Erica Myers & Steven L. Puller & Jeremy D. West, 2019. "Effects of Mandatory Energy Efficiency Disclosure in Housing Markets," NBER Working Papers 26436, National Bureau of Economic Research, Inc.
    17. Hedlund, Jonas, 2015. "Persuasion with communication costs," Games and Economic Behavior, Elsevier, vol. 92(C), pages 28-40.
    18. Onuchic, Paula, 2025. "Advisors with hidden motives," LSE Research Online Documents on Economics 129091, London School of Economics and Political Science, LSE Library.
    19. Pak Hung Au, 2015. "Dynamic information disclosure," RAND Journal of Economics, RAND Corporation, vol. 46(4), pages 791-823, October.
    20. S. Nageeb Ali & Andreas Kleiner & Kun Zhang, 2024. "From Design to Disclosure," Papers 2411.03608, arXiv.org, revised Jan 2026.
    21. Vladimir Asriyan & Dana Foarta & Victoria Vanasco, 2023. "The Good, the Bad, and the Complex: Product Design with Imperfect Information," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 187-226, May.
    22. Glode, Vincent & Opp, Christian C. & Zhang, Xingtan, 2018. "Voluntary disclosure in bilateral transactions," Journal of Economic Theory, Elsevier, vol. 175(C), pages 652-688.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2602.01066. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.