How Information Design Shapes Optimal Selling Mechanisms

Hien Pham

MPRA Paper from University Library of Munich, Germany

Abstract: A monopolistic seller jointly designs allocation rules and (new) information about a pay-off relevant state to a buyer with private types. When the new information flips the ranking of willingness to pay across types, a screening menu of prices and threshold disclosures is optimal. Conversely, when its impact is marginal, bunching via a single posted price and threshold disclosure is (approximately) optimal. While information design expands the scope for random mechanisms to outperform their deterministic counterparts, its presence leads to an equivalence result regarding sequential versus. static screening.

Keywords: mechanism design; information design; sequential screening; random mechanisms; bunching. (search for similar items in EconPapers)
JEL-codes: D42 D82 D86 L15 (search for similar items in EconPapers)
Date: 2023-04-30, Revised 2024-03-17
New Economics Papers: this item is included in nep-com, nep-cta, nep-dcm, nep-des and nep-mic
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