IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/2233.html

Third-Party Sale of Information

Author

Listed:
  • Evans, R.
  • Park, I-U.

Abstract

We study design and pricing of information by a monopoly information provider for a buyer in a trading relationship with a seller. The profit-maximizing information structure has a binary threshold character. This structure is inefficient when seller production cost is low. Compared with a situation of no information, the information provider increases welfare if cost is high but reduces it if cost is low. A monopoly provider creates higher welfare than a competitive market in information if the prior distribution of buyer valuations is not too concentrated. Giving the seller a veto over the information contract generates full efficiency.

Suggested Citation

  • Evans, R. & Park, I-U., 2022. "Third-Party Sale of Information," Cambridge Working Papers in Economics 2233, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2233
    Note: rae1
    as

    Download full text from publisher

    File URL: https://www.econ.cam.ac.uk/sites/default/files/publication-cwpe-pdfs/cwpe2233.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anne-Katrin Roesler & Balázs Szentes, 2017. "Buyer-Optimal Learning and Monopoly Pricing," American Economic Review, American Economic Association, vol. 107(7), pages 2072-2080, July.
    2. Lewis, Tracy R & Sappington, David E M, 1994. "Supplying Information to Facilitate Price Discrimination," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 309-327, May.
    3. Bergemann, Dirk & Pesendorfer, Martin, 2007. "Information structures in optimal auctions," Journal of Economic Theory, Elsevier, vol. 137(1), pages 580-609, November.
    4. Péter Eső & Balázs Szentes, 2007. "Optimal Information Disclosure in Auctions and the Handicap Auction," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 705-731.
    5. Kolotilin, Anton, 2018. "Optimal information disclosure: a linear programming approach," Theoretical Economics, Econometric Society, vol. 13(2), May.
    6. Admati, Anat R. & Pfleiderer, Paul, 1986. "A monopolistic market for information," Journal of Economic Theory, Elsevier, vol. 39(2), pages 400-438, August.
    7. Dirk Bergemann & Alessandro Bonatti & Alex Smolin, 2018. "The Design and Price of Information," American Economic Review, American Economic Association, vol. 108(1), pages 1-48, January.
    8. Roman Inderst & Marco Ottaviani, 2012. "Competition through Commissions and Kickbacks," American Economic Review, American Economic Association, vol. 102(2), pages 780-809, April.
    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. Suehyun Kwon, 2018. "Selling Complementary Goods: Information and Products," CESifo Working Paper Series 7394, CESifo.
    2. Peter Achim & Bojia Li & Lily Ling Yang, 2025. "Endorsements and Referrals: Product Recommendations in Bilateral Trade," CRC TR 224 Discussion Paper Series crctr224_2025_657, University of Bonn and University of Mannheim, Germany.
    3. Lang, Ruitian, 2019. "Try before you buy: A theory of dynamic information acquisition," Journal of Economic Theory, Elsevier, vol. 183(C), pages 1057-1093.
    4. Jonas von Wangenheim, 2022. "Optimal Information Design of Online Marketplaces with Return Rights," CRC TR 224 Discussion Paper Series crctr224_2022_352v2, University of Bonn and University of Mannheim, Germany, revised Apr 2024.
    5. von Wangenheim, Jonas, 2017. "Consumer-Optimal Information Design," Rationality and Competition Discussion Paper Series 53, CRC TRR 190 Rationality and Competition.
    6. Terstiege, Stefan & Wasser, Cédric, 2020. "Buyer-optimal extensionproof information," Journal of Economic Theory, Elsevier, vol. 188(C).
    7. Dirk Bergemann & Stephen Morris, 2019. "Information Design: A Unified Perspective," Journal of Economic Literature, American Economic Association, vol. 57(1), pages 44-95, March.
    8. Kolotilin, Anton & Li, Hongyi, 2021. "Relational communication," Theoretical Economics, Econometric Society, vol. 16(4), November.
    9. Daron Acemoglu & Ali Makhdoumi & Azarakhsh Malekian & Asu Ozdaglar, 2022. "Too Much Data: Prices and Inefficiencies in Data Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 14(4), pages 218-256, November.
    10. Pham, Hien, 2023. "How Information Design Shapes Optimal Selling Mechanisms," MPRA Paper 120462, University Library of Munich, Germany, revised 17 Mar 2024.
    11. Pham, Hien, 2023. "How Information Design Shapes Optimal Selling Mechanisms," MPRA Paper 120989, University Library of Munich, Germany, revised 06 Mar 2024.
    12. Forand, Jean Guillaume, 2013. "Competing through information provision," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 438-451.
    13. Arlindo Skenderaj, 2025. "Selling supplemental information," Papers 2511.14103, arXiv.org, revised Feb 2026.
    14. Maxim Ivanov, 2021. "Optimal monotone signals in Bayesian persuasion mechanisms," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 955-1000, October.
    15. Yang Cai & Yingkai Li & Jinzhao Wu, 2024. "Algorithmic Information Disclosure in Optimal Auctions," Papers 2403.08145, arXiv.org.
    16. Andrew Li & R. Ravi & Karan Singh & Zihong Yi & Weizhong Zhang, 2025. "How to Sell High-Dimensional Data Optimally," Papers 2510.15214, arXiv.org, revised Mar 2026.
    17. Anton Kolotilin & Tymofiy Mylovanov & Andriy Zapechelnyuk & Ming Li, 2017. "Persuasion of a Privately Informed Receiver," Econometrica, Econometric Society, vol. 85(6), pages 1949-1964, November.
    18. Zhu, Shuguang, 2023. "Private disclosure with multiple agents," Journal of Economic Theory, Elsevier, vol. 212(C).
    19. Anja Prummer & Francesco Nava, 2023. "Value Design in Optimal Mechanisms," Economics working papers 2023-05, Department of Economics, Johannes Kepler University Linz, Austria.
    20. Yingkai Li, 2021. "Selling Data to an Agent with Endogenous Information," Papers 2103.05788, arXiv.org, revised Aug 2023.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

    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:cam:camdae:2233. 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: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    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.