Costly information intermediation: Quality vs. Spillovers

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2025
Volume: 239
Issue: C

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze information intermediaries in large economies with costly information acquisition. Intermediaries face a trade-off between quality and dissemination speed. Both altruistic policymakers and profit-maximizing monopolists optimally choose to sample limited information, increasing the number of partially informed agents and enhancing spillovers despite slower information accumulation. Altruistic information-sharing bureaus minimize fees by inducing low provider default rates, while monopolist bureaus maximize fees through higher faulty service rates. Information trade resembles a natural monopoly, where competition reduces efficiency through redundant costs and lower information spillovers. These findings inform regulatory design in platforms and information-intensive markets.

Technical Details

RePEc Handle
repec:eee:jeborg:v:239:y:2025:i:c:s0167268125003889
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29