 Selling information in competitive environmentsAlessandro Bonatti, Munther Dahleh, Thibaut Horel and Amir Nouripour Journal of Economic Theory, 2024, vol. 216, issue C Abstract: Data buyers compete in a game of incomplete information about which a single data seller owns some payoff-relevant information. The seller faces a joint information- and mechanism-design problem: deciding which information to sell, while eliciting the buyers' types and imposing payments. We derive the welfare- and revenue-optimal mechanisms for a class of games with binary actions and states. Our results highlight the critical properties of selling information in competitive environments: (i) the negative externalities arising from buyer competition increase the profitability of recommending the correct action to one buyer exclusively; (ii) for the buyers to follow the seller's recommendations, the degree of exclusivity must be limited; (iii) the buyers' obedience constraints also reduce the distortions in the allocation of information introduced by a monopolist; (iv) as competition becomes fiercer, these limitations become more severe, weakening the impact of market power on the optimal allocation of information. Keywords: Data; Competition; Screening; Information design; Externalities (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:216:y:2024:i:c:s0022053123001758 DOI: 10.1016/j.jet.2023.105779 Access Statistics for this article Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell More articles in Journal of Economic Theory from Elsevier |
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