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Selling Information

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Abstract

We characterize optimal selling protocols/equilibria of a game in which an Agent first puts hidden effort to acquire information and then transacts with a Firm that uses this information to take a decision. We determine the equilibrium payoffs that maximize incentives to acquire information. Our analysis is similar to finding ex ante optimal self-enforcing contracts since information sharing, outcomes and transfers cannot be contracted upon. We show when and how selling and transmitting information gradually helps. We also show how mixing/side bets increases the Agent’s payoff. In fact, she can get the entire surplus with rich enough tests.

Suggested Citation

  • Johannes Horner & Andrzej Skrzypacz, 2009. "Selling Information," Cowles Foundation Discussion Papers 1743R, Cowles Foundation for Research in Economics, Yale University, revised Jun 2011.
    • Handle: RePEc:cwl:cwldpp:1743r
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    References listed on IDEAS

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    Cited by:

    1. Xu, Haibo, 2021. "A model of gradual information disclosure," Games and Economic Behavior, Elsevier, vol. 129(C), pages 238-269.
    2. Glazer, Jacob & Kremer, Ilan & Perry, Motty, 2015. "Crowd Learning without Herding : A Mechanism Design Approach," The Warwick Economics Research Paper Series (TWERPS) 1095, University of Warwick, Department of Economics.
    3. Kfir Eliaz & Roberto Serrano, 2014. "Sending information to interactive receivers playing a generalized prisoners’ dilemma," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(2), pages 245-267, May.
    4. Miceli, Thomas J., 2011. "The real puzzle of blackmail: An informational approach," Information Economics and Policy, Elsevier, vol. 23(2), pages 182-188, June.
    5. Hidir, Sinem, 2014. "Strategic Inaccuracy in Bargaining," TSE Working Papers 14-541, Toulouse School of Economics (TSE).
    6. Galperti, Simone & Trevino, Isabel, 2020. "Coordination motives and competition for attention in information markets," Journal of Economic Theory, Elsevier, vol. 188(C).
    7. Kwiek, Maksymilian, 2020. "Communication via intermediaries," Games and Economic Behavior, Elsevier, vol. 121(C), pages 190-203.
    8. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    9. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006, Institute of Social and Economic Research, Osaka University.
    10. Gabriele Gratton & Richard Holden & Anton Kolotilin, 2018. "When to Drop a Bombshell," Review of Economic Studies, Oxford University Press, vol. 85(4), pages 2139-2172.
    11. Gorkem Celik, 2015. "Implementation by Gradual Revelation," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 271-296, June.
    12. Augenblick, Ned & Bodoh-Creed, Aaron, 2018. "To reveal or not to reveal: Privacy preferences and economic frictions," Games and Economic Behavior, Elsevier, vol. 110(C), pages 318-329.
    13. Wioletta Dziuda & Ronen Gradwohl, 2015. "Achieving Cooperation under Privacy Concerns," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 142-173, August.
    14. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006r, Institute of Social and Economic Research, Osaka University, revised Jun 2018.
    15. Dirk Bergemann & Alessandro Bonatti, 2015. "Selling Cookies," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 259-294, August.
    16. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006rr, Institute of Social and Economic Research, Osaka University, revised Jan 2018.
    17. Romans Pancs, 2014. "Workup," Review of Economic Design, Springer;Society for Economic Design, vol. 18(1), pages 37-71, March.
    18. Dirk Bergemann & Alessandro Bonatti & Alex Smolin, 2014. "Selling Experiments: Menu Pricing of Information," Cowles Foundation Discussion Papers 1952, Cowles Foundation for Research in Economics, Yale University.
    19. Renault, Jérôme & Solan, Eilon & Vieille, Nicolas, 2017. "Optimal dynamic information provision," Games and Economic Behavior, Elsevier, vol. 104(C), pages 329-349.
    20. Deepanshu Vasal, 2020. "Dynamic information design," Papers 2005.07267, arXiv.org.
    21. Ichihashi, Shota, 2021. "The economics of data externalities," Journal of Economic Theory, Elsevier, vol. 196(C).

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    More about this item

    Keywords

    Value of information; Dynamic game;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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

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