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Selling Information

Author

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  • Johannes Hörner
  • Andrzej Skrzypacz

Abstract

A firm considers hiring an agent who may be competent for a potential project or not. The agent can prove her competence but faces a holdup problem. We propose a model of persuasion and show how gradualism helps mitigate the holdup problem. We show when it is optimal to give away part of the information at the beginning of the bargaining and sell the remainder in dribs and drabs. The agent can appropriate only part of the value of information. Introducing a third party allows her to extract the maximum surplus.

Suggested Citation

  • Johannes Hörner & Andrzej Skrzypacz, 2016. "Selling Information," Journal of Political Economy, University of Chicago Press, vol. 124(6), pages 1515-1562.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/688874
    DOI: 10.1086/688874
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Xu, Haibo, 2021. "A model of gradual information disclosure," Games and Economic Behavior, Elsevier, vol. 129(C), pages 238-269.
    2. Glazer, Jacob & Kremer, Ilan & Perry, Motty, 2015. "Crowd Learning without Herding : A Mechanism Design Approach," The Warwick Economics Research Paper Series (TWERPS) 1095, University of Warwick, Department of Economics.
    3. Miceli, Thomas J., 2011. "The real puzzle of blackmail: An informational approach," Information Economics and Policy, Elsevier, vol. 23(2), pages 182-188, June.
    4. Kawamura, Kohei & Le Quement, Mark T., 2023. "News credibility and the quest for clicks," Journal of Public Economics, Elsevier, vol. 227(C).
    5. Kwiek, Maksymilian, 2020. "Communication via intermediaries," Games and Economic Behavior, Elsevier, vol. 121(C), pages 190-203.
    6. Gorkem Celik, 2015. "Implementation by Gradual Revelation," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 271-296, June.
    7. Augenblick, Ned & Bodoh-Creed, Aaron, 2018. "To reveal or not to reveal: Privacy preferences and economic frictions," Games and Economic Behavior, Elsevier, vol. 110(C), pages 318-329.
    8. Song, Ziyu & Wu, Shan, 2023. "Post financial forecasting game theory and decision making," Finance Research Letters, Elsevier, vol. 58(PA).
    9. Wioletta Dziuda & Ronen Gradwohl, 2015. "Achieving Cooperation under Privacy Concerns," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 142-173, August.
    10. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006rr, Institute of Social and Economic Research, Osaka University, revised Jan 2018.
    11. Romans Pancs, 2014. "Workup," Review of Economic Design, Springer;Society for Economic Design, vol. 18(1), pages 37-71, March.
    12. Deepanshu Vasal, 2020. "Dynamic information design," Papers 2005.07267, arXiv.org.
    13. Dirk Bergemann & Alessandro Bonatti, 2015. "Selling Cookies," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 259-294, August.
    14. Kfir Eliaz & Roberto Serrano, 2014. "Sending information to interactive receivers playing a generalized prisoners’ dilemma," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(2), pages 245-267, May.
    15. Wu, Wenhao, 2023. "Sequential Bayesian persuasion," Journal of Economic Theory, Elsevier, vol. 214(C).
    16. Hidir, Sinem, 2014. "Strategic Inaccuracy in Bargaining," TSE Working Papers 14-541, Toulouse School of Economics (TSE).
    17. Galperti, Simone & Trevino, Isabel, 2020. "Coordination motives and competition for attention in information markets," Journal of Economic Theory, Elsevier, vol. 188(C).
    18. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    19. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006, Institute of Social and Economic Research, Osaka University.
    20. Gabriele Gratton & Richard Holden & Anton Kolotilin, 2018. "When to Drop a Bombshell," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(4), pages 2139-2172.
    21. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006r, Institute of Social and Economic Research, Osaka University, revised Jun 2018.
    22. Dirk Bergemann & Alessandro Bonatti & Alex Smolin, 2014. "Selling Experiments: Menu Pricing of Information," Cowles Foundation Discussion Papers 1952, Cowles Foundation for Research in Economics, Yale University.
    23. Renault, Jérôme & Solan, Eilon & Vieille, Nicolas, 2017. "Optimal dynamic information provision," Games and Economic Behavior, Elsevier, vol. 104(C), pages 329-349.
    24. Ichihashi, Shota, 2021. "The economics of data externalities," Journal of Economic Theory, Elsevier, vol. 196(C).

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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