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Discriminatory Information Disclosure

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  • Hao Li
  • Xianwen Shi

Abstract

A seller designs a mechanism to sell a single object to a potential buyer whose private type is his incomplete information about his valuation. The seller can disclose additional information to the buyer about his valuation without observing its realization. In both discrete-type and continuous-type settings, we show that discriminatory disclosure - releasing different amounts of additional information to different buyer types - dominates full disclosure in terms of seller revenue. An implication is that the orthogonal decomposition technique, while an important tool in dynamic mechanism design, is generally invalid when information disclosure is part of the design.

Suggested Citation

  • Hao Li & Xianwen Shi, 2017. "Discriminatory Information Disclosure," Working Papers tecipa-583, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-583
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    References listed on IDEAS

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    8. Krähmer, Daniel & Strausz, Roland, 2015. "Ex post information rents in sequential screening," Games and Economic Behavior, Elsevier, vol. 90(C), pages 257-273.
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    Cited by:

    1. Krähmer, Daniel & Strausz, Roland, 2015. "Ex post information rents in sequential screening," Games and Economic Behavior, Elsevier, vol. 90(C), pages 257-273.
    2. Litterscheid, Sina & Szalay, Dezsö, 2014. "Sequential, multidimensional screening," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100621, Verein für Socialpolitik / German Economic Association.
    3. Bergemann, Dirk & Wambach, Achim, 2015. "Sequential information disclosure in auctions," Journal of Economic Theory, Elsevier, vol. 159(PB), pages 1074-1095.
    4. Krähmer, Daniel & Strausz, Roland, 2017. "Sequential versus static screening: An equivalence result," Games and Economic Behavior, Elsevier, vol. 106(C), pages 317-328.
    5. repec:eee:ecolet:v:163:y:2018:i:c:p:83-86 is not listed on IDEAS
    6. repec:eee:renene:v:122:y:2018:i:c:p:265-274 is not listed on IDEAS

    More about this item

    Keywords

    Sequential Screening; Information Disclosure; Dynamic Mechanism Design; Orthogonal Decomposition;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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