IDEAS home Printed from https://ideas.repec.org/p/cla/levarc/786969000000000680.html
   My bibliography  Save this paper

Selling Information

Author

Listed:
  • Johannes Horner
  • Andrzej Skrzypacz

Abstract

We characterize optimal selling protocols/equilibria of a game in which an Agent first puts hidden effort to acquire information and then transacts with a Firm that uses this information to take a decision. We determine the equilibrium payoffs that maximize incentives to acquire information. Our analysis is similar to finding ex ante optimal self-enforcing contracts since information sharing, outcomes and transfers cannot be contracted upon. We show when and how selling and transmitting information gradually helps. We also show how mixing/side bets increases the Agent’s payoff. In fact, she can get the entire surplus with rich enough tests.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Johannes Horner & Andrzej Skrzypacz, 2013. "Selling Information," Levine's Working Paper Archive 786969000000000680, David K. Levine.
    • Handle: RePEc:cla:levarc:786969000000000680
    as

    Download full text from publisher

    File URL: http://www.dklevine.com/archive/refs4786969000000000680.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(2), pages 327-358.
    2. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    3. Landsberger, Michael & Meilijson, Isaac, 1990. "Lotteries, insurance, and star-shaped utility functions," Journal of Economic Theory, Elsevier, vol. 52(1), pages 1-17, October.
    4. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 259-276.
    5. Yeon-Koo Che & József Sákovics, 2004. "A Dynamic Theory of Holdup," Econometrica, Econometric Society, vol. 72(4), pages 1063-1103, July.
    6. Robert J. Aumann & Sergiu Hart, 2003. "Long Cheap Talk," Econometrica, Econometric Society, vol. 71(6), pages 1619-1660, November.
      • Robert J. Aumann & Sergiu Hart, 2002. "Long Cheap Talk," Discussion Paper Series dp284, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem, revised Nov 2002.
    7. Admati, Anat R & Pfleiderer, Paul, 1988. "Selling and Trading on Information in Financial Markets," American Economic Review, American Economic Association, vol. 78(2), pages 96-103, May.
    8. Forges, Françoise & Koessler, Frédéric, 2008. "Long persuasion games," Journal of Economic Theory, Elsevier, vol. 143(1), pages 1-35, November.
    9. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, April.
    10. Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2013. "Strategic information exchange," Games and Economic Behavior, Elsevier, vol. 82(C), pages 444-467.
    11. Gul, Faruk, 2001. "Unobservable Investment and the Hold-Up Problem," Econometrica, Econometric Society, vol. 69(2), pages 343-376, March.
    12. Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476, April.
    13. James J. Anton & Dennis A. Yao, 2002. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 513-531.
    14. Françoise Forges, 1990. "Equilibria with Communication in a Job Market Example," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 375-398.
    15. repec:dau:papers:123456789/179 is not listed on IDEAS
    16. Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 345-364.
    17. Olivier Compte & Philippe Jehiel, 2004. "Gradualism in Bargaining and Contribution Games," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(4), pages 975-1000.
    18. Admati, Anat R & Pfleiderer, Paul, 1990. "Direct and Indirect Sale of Information," Econometrica, Econometric Society, vol. 58(4), pages 901-928, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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. 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.
    4. Miceli, Thomas J., 2011. "The real puzzle of blackmail: An informational approach," Information Economics and Policy, Elsevier, vol. 23(2), pages 182-188, June.
    5. Hidir, Sinem, 2014. "Strategic Inaccuracy in Bargaining," TSE Working Papers 14-541, Toulouse School of Economics (TSE).
    6. Galperti, Simone & Trevino, Isabel, 2020. "Coordination motives and competition for attention in information markets," Journal of Economic Theory, Elsevier, vol. 188(C).
    7. Kawamura, Kohei & Le Quement, Mark T., 2023. "News credibility and the quest for clicks," Journal of Public Economics, Elsevier, vol. 227(C).
    8. Kwiek, Maksymilian, 2020. "Communication via intermediaries," Games and Economic Behavior, Elsevier, vol. 121(C), pages 190-203.
    9. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    10. Hitoshi Sadakane, 2017. "Multistage Information Transmission with Voluntary Monetary Transfer," ISER Discussion Paper 1006, Institute of Social and Economic Research, Osaka University.
    11. 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.
    12. Gorkem Celik, 2015. "Implementation by Gradual Revelation," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 271-296, June.
    13. 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.
    14. Song, Ziyu & Wu, Shan, 2023. "Post financial forecasting game theory and decision making," Finance Research Letters, Elsevier, vol. 58(PA).
    15. Wioletta Dziuda & Ronen Gradwohl, 2015. "Achieving Cooperation under Privacy Concerns," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 142-173, August.
    16. 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.
    17. Dirk Bergemann & Alessandro Bonatti, 2015. "Selling Cookies," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 259-294, August.
    18. 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.
    19. Romans Pancs, 2014. "Workup," Review of Economic Design, Springer;Society for Economic Design, vol. 18(1), pages 37-71, March.
    20. 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.
    21. Renault, Jérôme & Solan, Eilon & Vieille, Nicolas, 2017. "Optimal dynamic information provision," Games and Economic Behavior, Elsevier, vol. 104(C), pages 329-349.
    22. Deepanshu Vasal, 2020. "Dynamic information design," Papers 2005.07267, arXiv.org.
    23. Ichihashi, Shota, 2021. "The economics of data externalities," Journal of Economic Theory, Elsevier, vol. 196(C).
    24. Wu, Wenhao, 2023. "Sequential Bayesian persuasion," Journal of Economic Theory, Elsevier, vol. 214(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:cwl:cwldpp:1743rr is not listed on IDEAS
    2. Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2013. "Strategic information exchange," Games and Economic Behavior, Elsevier, vol. 82(C), pages 444-467.
    3. Eso, Peter & Wallace, Chris, 2016. "Persuasion and Pricing : Dynamic Trading with Hard Evidence," CRETA Online Discussion Paper Series 24, Centre for Research in Economic Theory and its Applications CRETA.
    4. Jacquemet, Nicolas & Koessler, Frédéric, 2013. "Using or hiding private information? An experimental study of zero-sum repeated games with incomplete information," Games and Economic Behavior, Elsevier, vol. 78(C), pages 103-120.
    5. Xu, Haibo, 2021. "A model of gradual information disclosure," Games and Economic Behavior, Elsevier, vol. 129(C), pages 238-269.
    6. Pitchford, Rohan & Snyder, Christopher M., 2004. "A solution to the hold-up problem involving gradual investment," Journal of Economic Theory, Elsevier, vol. 114(1), pages 88-103, January.
    7. Chantal Marlats, 2021. "Reputation effects in stochastic games with two long-lived players," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 1-31, February.
    8. Dirk Bergemann & Stephen Morris, 2019. "Information Design: A Unified Perspective," Journal of Economic Literature, American Economic Association, vol. 57(1), pages 44-95, March.
    9. Golosov, Mikhail & Skreta, Vasiliki & Tsyvinski, Aleh & Wilson, Andrea, 2014. "Dynamic strategic information transmission," Journal of Economic Theory, Elsevier, vol. 151(C), pages 304-341.
    10. Matros, Alexander & Smirnov, Vladimir, 2016. "Duplicative search," Games and Economic Behavior, Elsevier, vol. 99(C), pages 1-22.
    11. Aghamolla, Cyrus & Hashimoto, Tadashi, 2020. "Information arrival, delay, and clustering in financial markets with dynamic freeriding," Journal of Financial Economics, Elsevier, vol. 138(1), pages 27-52.
    12. Georgiadis, George, 2017. "Deadlines and infrequent monitoring in the dynamic provision of public goods," Journal of Public Economics, Elsevier, vol. 152(C), pages 1-12.
    13. Françoise Forges & Ulrich Horst & Antoine Salomon, 2016. "Feasibility and individual rationality in two-person Bayesian games," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(1), pages 11-36, March.
    14. , & ,, 2013. "Implementation of communication equilibria by correlated cheap talk: The two-player case," Theoretical Economics, Econometric Society, vol. 8(1), January.
    15. T. Renee Bowen & George Georgiadis & Nicolas S. Lambert, 2019. "Collective Choice in Dynamic Public Good Provision," American Economic Journal: Microeconomics, American Economic Association, vol. 11(1), pages 243-298, February.
    16. Solan, Eilon & Solan, Omri N. & Solan, Ron, 2020. "Jointly controlled lotteries with biased coins," Games and Economic Behavior, Elsevier, vol. 119(C), pages 383-391.
    17. Bowen, T. Renee & Georgiadis, George & Lambert, Nicolas S., 2015. "Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority," Research Papers 3346, Stanford University, Graduate School of Business.
    18. Escobar, Juan F. & Llanes, Gastón, 2018. "Cooperation dynamics in repeated games of adverse selection," Journal of Economic Theory, Elsevier, vol. 176(C), pages 408-443.
    19. Gopal Das Varma & Giuseppe Lopomo, 2010. "Non‐Cooperative Entry Deterrence In License Auctions: Dynamic Versus Sealed Bid," Journal of Industrial Economics, Wiley Blackwell, vol. 58(2), pages 450-476, June.
    20. Forges, Françoise & Koessler, Frédéric, 2008. "Long persuasion games," Journal of Economic Theory, Elsevier, vol. 143(1), pages 1-35, November.
    21. Dino Gerardi & Lucas Maestri & Ignacio Monzón, 2022. "Bargaining over a Divisible Good in the Market for Lemons," American Economic Review, American Economic Association, vol. 112(5), pages 1591-1620, May.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cla:levarc:786969000000000680. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: David K. Levine (email available below). General contact details of provider: http://www.dklevine.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.