Screening with Persuasion

Dirk Bergemann, Tibor Heumann and Stephen Morris

No 2338R2, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

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 profit. 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 seller decreases the variety of items below the efficient level in order to reduce the information rents of the buyers.

Keywords: Nonlinear Pricing; Screening; Bayesian Persuasion; Finite Menu; Second-Degree Price Discrimination; Recommender System (search for similar items in EconPapers)
JEL-codes: D44 D47 D83 D84 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2023-09
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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https://cowles.yale.edu/sites/default/files/2023-09/d2338r2.pdf (application/pdf)

Related works:
Working Paper: Screening with Persuasion (2025)
Working Paper: Screening with Persuasion (2023)
Working Paper: Screening with Persuasion (2022)
Working Paper: Screening with Persuasion (2022)
Working Paper: Screening with Persuasion (2022)
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