Screening with Persuasion

Dirk Bergemann, Tibor Heumann and Stephen Morris

Papers from arXiv.org

Abstract: We analyze a nonlinear pricing model where the seller controls both product pricing (screening) and buyer information about their own values (persuasion). We prove that the optimal mechanism always consists of finitely many signals and items, even with a continuum of buyer values. The seller optimally pools buyer values and reduces product variety to minimize informational rents. We show that value pooling is optimal even for finite value distributions if their entropy exceeds a critical threshold. We also provide sufficient conditions under which the optimal menu restricts offering to a single item.

Date: 2022-12, Revised 2025-03
New Economics Papers: this item is included in nep-com, nep-des, nep-gth and nep-mic
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Citations: View citations in EconPapers (2)

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http://arxiv.org/pdf/2212.03360 Latest version (application/pdf)

Related works:
Working Paper: Screening with Persuasion (2023)
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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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2212.03360

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