Screening with Persuasion

Dirk Bergemann, Tibor Heumann and Stephen Morris

No 17898, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We consider a general nonlinear pricing environment with private information. The seller can control both the signal that the buyers receive about their value and the selling mechanism. We characterize the optimal menu and information structure that jointly maximize the seller's profits. The optimal screening mechanism has finitely many items even with a continuum of values. We identify sufficient conditions under which the optimal mechanism has a single item. Thus, the socially efficient variety of items is decreased drastically at the expense of higher revenue and lower information rents.

Keywords: Screening (search for similar items in EconPapers)
JEL-codes: D44 D47 D83 D84 (search for similar items in EconPapers)
Date: 2023-02
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Related works:
Journal Article: Screening with Persuasion (2026)
Working Paper: Screening with Persuasion (2025)
Working Paper: Screening with Persuasion (2025)
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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