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Selling Information

Johannes Horner

Yale University - Cowles Foundation

Andrzej Skrzypacz

Stanford Graduate School of Business

August 12, 2010

Cowles Foundation Discussion Paper No. 1743

We study a dynamic buyer-seller problem in which the good is information and there are no property rights. The potential buyer is reluctant to pay for information whose value to him is uncertain, but the seller cannot credibly convey its value to the buyer without disclosing the information itself. Information comes as divisible hard evidence. We show how and why the seller can appropriate a substantial fraction of the value through gradual revelation, and how the entire value can be extracted with the help of a mediator.

Number of Pages in PDF File: 56

Keywords: Value of information, Dynamic game

JEL Classification: C72, D82, D83

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Date posted: December 26, 2009 ; Last revised: August 14, 2010

Suggested Citation

Horner, Johannes and Skrzypacz, Andrzej, Selling Information (August 12, 2010). Cowles Foundation Discussion Paper No. 1743. Available at SSRN: https://ssrn.com/abstract=1526606 or http://dx.doi.org/10.2139/ssrn.1526606

Contact Information

Johannes Horner (Contact Author)
Yale University - Cowles Foundation ( email )
Box 208281
New Haven, CT 06520-8281
United States

Andrzej Skrzypacz
Stanford Graduate School of Business ( email )
655 Knight Way
Stanford, CA 94305-5015
United States
650-736-0987 (Phone)
650-725-9932 (Fax)

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