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Selling Information

56 Pages Posted: 26 Dec 2009 Last revised: 14 Aug 2010

Johannes Horner

Yale University - Cowles Foundation

Andrzej Skrzypacz

Stanford University - Stanford Graduate School of Business

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Date Written: August 12, 2010


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.

Keywords: Value of information, Dynamic game

JEL Classification: C72, D82, D83

Suggested Citation

Horner, Johannes and Skrzypacz, Andrzej, Selling Information (August 12, 2010). Cowles Foundation Discussion Paper No. 1743. Available at SSRN: or

Johannes Horner (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Andrzej Skrzypacz

Stanford University - 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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