The Design and Price of Information

Dirk Bergemann, Alessandro Bonatti and Alex Smolin

American Economic Review, 2018, vol. 108, issue 1, 1-48

Abstract: A data buyer faces a decision problem under uncertainty. He can augment his initial private information with supplemental data from a data seller. His willingness to pay for supplemental data is determined by the quality of his initial private information. The data seller optimally offers a menu of statistical experiments. We establish the properties that any revenue-maximizing menu of experiments must satisfy. Every experiment is a non-dispersed stochastic matrix, and every menu contains a fully informative experiment. In the cases of binary states and actions, or binary types, we provide an explicit construction of the optimal menu of experiments.

JEL-codes: D42 D81 D82 D83 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/aer.20161079
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Citations: View citations in EconPapers (79)

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Related works:
Working Paper: The Design and Price of Information (2017)
Working Paper: The Design and Price of Information (2016)
Working Paper: The Design and Price of Information (2016)
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