Monopolistic screening and uninformed buyers

C-Tier
Journal: Economic Modeling
Year: 2014
Volume: 36
Issue: C
Pages: 348-353

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

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

Abstract

In the standard monopolistic screening problem, buyers obtain information rent as a result of possessing private information; if a contract can be offered before the buyer knows his valuation, the seller can extract the full (expected) surplus. I consider a situation where the buyer may or may not have private information about his valuation at the time the contract is offered. Is the seller (strictly) better off as compared to the standard situation? The answer depends crucially on the specific model. In the 2-types model, unless the probability (that the buyer is uninformed) reaches a critical threshold, the seller is unable to benefit from the buyer's ignorance. In the continuum-types model, on the other hand, optimal expected profit is strictly higher than in the standard model whenever this probability is positive.

Technical Details

RePEc Handle
repec:eee:ecmode:v:36:y:2014:i:c:p:348-353
Journal Field
General
Author Count
1
Added to Database
2026-01-24