Selling with Evidence

Vasiliki Skreta and Frederic Koessler

No 12049, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how to optimally sell a good in a bilateral asymmetric information monopoly setting with interdependent values when the informed seller can voluntarily and costlessly provide evidence about the good's characteristics. Equilibrium allocations are feasible and immune to deviations to any mechanism. We show that there is an ex-ante profit-maximizing selling procedure that is an equilibrium of the mechanism-proposal game. In contrast to posted price settings, information unravelling of product characteristics may fail even when all buyer types agree on the ranking of product quality.

Keywords: Informed principal; Consumer heterogeneity; Interdependent valuations; Product information disclosure; Mechanism design; Certification (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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Related works:
Journal Article: Selling with evidence (2019)
Working Paper: Selling with Evidence (2019)
Working Paper: Selling with Evidence (2019)
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