Buyer-optimal extensionproof information

A-Tier
Journal: Journal of Economic Theory
Year: 2020
Volume: 188
Issue: C

Authors (2)

Terstiege, Stefan (not in RePEc) Wasser, Cédric (Universität Basel)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

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

Abstract

Motivated by the regulation of product information, we study buyer-optimal information structures under monopoly pricing. The information structure determines the buyer's private learning of his valuation and in consequence the price the seller charges. By adding information, the seller may change the learning in her favor. We introduce the constraint that the information structure be extensionproof: the seller must have no incentive to add information. A two-parameter class of information structures implements every implementable buyer payoff. For some prior beliefs, but not for all, buyer-optimal information also results in efficient trade and in the same payoff for the seller as perfect learning.

Technical Details

RePEc Handle
repec:eee:jetheo:v:188:y:2020:i:c:s0022053118303570
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29