Information Revelation and Certification Intermediaries

Posted: 5 Mar 1999

See all articles by Alessandro Lizzeri

Alessandro Lizzeri

Princeton University - Department of Economics

Abstract

I discuss the role of intermediaries that search out the information of privately informed parties and then choose what to reveal to uninformed parties. The focus is on the strategic manipulation of information by these certification intermediaries. I show that in a class of environments the optimal choice for a monopoly intermediary is to reveal only whether quality is above some minimal standard. Despite this minimal information transmission, the intermediary can capture a large share of the surplus. I also show that competition among the intermediaries can lead to full information revelation.

JEL Classification: D82, D83

Suggested Citation

Lizzeri, Alessandro, Information Revelation and Certification Intermediaries. Rand Journal of Economics, Vol. 30, No. 2, Available at SSRN: https://ssrn.com/abstract=150260

Alessandro Lizzeri (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States
08544 (Fax)

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