Data Provision to an Informed Seller

Shota Ichihashi and Alex Smolin

No 17963, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A monopoly seller is privately and imperfectly informed about the buyer's value of the product. The seller uses information to price discriminate the buyer. A designer offers a mechanism that provides the seller with additional information based on the seller’s report about her type. We establish the impossibility of screening for welfare purposes—i.e., the designer can attain any implementable combination of buyer surplus and seller profit by providing the same signal to all seller types. We use this result to characterize the set of implementable welfare outcomes, study the seller’s incentive to acquire third-party data, and demonstrate the trade-off between buyer surplus and efficiency.

Keywords: Bayesian; persuasion (search for similar items in EconPapers)
JEL-codes: D42 D82 D83 (search for similar items in EconPapers)
Date: 2023-03
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Working Paper: Data Provision to an Informed Seller (2023)
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