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