Selling Experiments: Menu Pricing of Information
35 Pages Posted: 16 Jul 2014
Date Written: July 14, 2014
A monopolist sells informative experiments to heterogeneous buyers. Buyers differ in their prior information, and hence in their willingness to pay for additional signals. The monopolist can profitably offer a menu of experiments. We show that, even under costless information acquisition and free degrading of information, the optimal menu is quite coarse. The seller offers at most two experiments, and we derive conditions under which at vs. discriminatory pricing is optimal.
Keywords: Experiments, Mechanism design, Price discrimination, Product differentiation, Selling information
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