When Public Information Helps Consumers

Keita Kuwahara

Papers from arXiv.org

Abstract: Does more information benefit consumers when a monopolist can adjust its price? Although information helps consumers evaluate a product, Schlee (1996) showed that public disclosure can reduce consumer surplus. We characterize exactly when the opposite occurs. More informative disclosure increases consumer surplus if and only if a weighted combination of the slope and curvature of Myerson's virtual type is nonnegative. Producer surplus always increases, while a weaker condition characterizes when total surplus increases. In particular, information benefits consumers whenever the virtual type is convex. Even when convexity fails, the same conclusion holds if monopoly output is sufficiently small.

Date: 2026-01, Revised 2026-07
New Economics Papers: this item is included in nep-ind and nep-mic
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