Buyer-Optimal Robust Information Structures

Stefan Terstiege () and Cédric Wasser

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We study buyer-optimal information structures under monopoly pricing. The information structure determines how well the buyer learns his valuation and affects, via the induced distribution of posterior valuations, the price charged by the seller. Motivated by the regulation of product information, we assume that the seller can disclose more if the learning is imperfect. Robust information structures prevent such disclosure, which is a constraint in the design problem. Our main result identifies a two-parameter class of information structures that implements every implementable buyer payoff. An upper bound on the buyer payoff where the social surplus is maximized and the seller obtains just her perfect-information payoff is attainable with some, but not all priors. When this bound is not attainable, optimal information structures can result in an inefficient allocation.

Keywords: information design; monopoly; regulation (search for similar items in EconPapers)
JEL-codes: D42 D82 D83 L51 (search for similar items in EconPapers)
Pages: 47
Date: 2018-07
New Economics Papers: this item is included in nep-com, nep-exp and nep-mic
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Buyer-optimal extensionproof information (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2018_034

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