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Screening with Persuasion

Author

Listed:
  • Bergemann, Dirk
  • Heumann, Tibor
  • Morris, Stephen

Abstract

We consider a general nonlinear pricing environment with private information. The seller can control both the signal that the buyers receive about their value and the selling mechanism. We characterize the optimal menu and information structure that jointly maximize the seller's profits. The optimal screening mechanism has finitely many items even with a continuum of values. We identify sufficient conditions under which the optimal mechanism has a single item. Thus, the socially efficient variety of items is decreased drastically at the expense of higher revenue and lower information rents.

Suggested Citation

  • Bergemann, Dirk & Heumann, Tibor & Morris, Stephen, 2023. "Screening with Persuasion," CEPR Discussion Papers 17898, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17898
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    File URL: https://cepr.org/publications/DP17898
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    Cited by:

    1. is not listed on IDEAS
    2. Laura Doval & Alex Smolin, 2025. "Calibrated Mechanism Design," Papers 2512.17858, arXiv.org, revised Feb 2026.
    3. Andreas Haupt & Zoe Hitzig, 2023. "Opaque Contracts," Papers 2301.13404, arXiv.org.
    4. Dirk Bergemann & Tibor Heumann & Stephen Morris, 2026. "Screening with Persuasion," Journal of Political Economy, University of Chicago Press, vol. 134(2), pages 570-625.
    5. Pietro Dall'Ara & Elia Sartori, 2026. "Screening in digital monopolies," Papers 2602.13014, arXiv.org, revised Mar 2026.
    6. Panagiotis Kyriazis & Edmund Lou, 2026. "Information Intermediaries in Monopolistic Screening," Papers 2604.09343, arXiv.org.

    More about this item

    Keywords

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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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