Third-Party Sale of Information
Robert Evans and
Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
We study design and pricing of information by a monopoly information provider for a buyer in a trading relationship with a seller. The profit-maximizing information structure has a binary threshold character. This structure is inefficient when seller production cost is low. Compared with a situation of no information, the information provider increases welfare if cost is high but reduces it if cost is low. A monopoly provider creates higher welfare than a competitive market in information if the prior distribution of buyer valuations is not too concentrated. Giving the seller a veto over the information contract generates full efficiency.
Keywords: Information Sale; Mechanism Design; Information Design (search for similar items in EconPapers)
JEL-codes: D61 D82 D83 L12 L15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-des, nep-gth, nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2233
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