The Design and Price of Information

52 Pages Posted: 25 Jul 2016

See all articles by Dirk Bergemann

Dirk Bergemann

Yale University - Cowles Foundation - Department of Economics; Yale University - Cowles Foundation

Alessandro Bonatti

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Alex Smolin

University of Bonn

Multiple version iconThere are 3 versions of this paper

Date Written: July 2016

Abstract

This paper analyzes the trade of information between a data buyer and a data seller. The data buyer faces a decision problem under uncertainty and seeks to augment his initial private information with supplemental data. The data seller is uncertain about the willingness-to-pay of the data buyer due to this private information. The data seller optimally offers a menu of (Blackwell) experiments as statistical tests to the data buyer.

The seller exploits differences in the beliefs of the buyer's types to reduce information rents while limiting the surplus that must be sacrificed to provide incentives.

Keywords: experiments, mechanism design, price discrimination, product differentiation., selling information

JEL Classification: D42, D82, D83

Suggested Citation

Bergemann, Dirk and Bonatti, Alessandro and Smolin, Alex, The Design and Price of Information (July 2016). CEPR Discussion Paper No. DP11412. Available at SSRN: https://ssrn.com/abstract=2814087

Dirk Bergemann (Contact Author)

Yale University - Cowles Foundation - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-3592 (Phone)
203-432-2128 (Fax)

HOME PAGE: http://www.econ.yale.edu/~dirk/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Alessandro Bonatti

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Alex Smolin

University of Bonn ( email )

37 Lennestr.
Bonn, ‎North Rhine-Westphalia 53113
Germany

HOME PAGE: http://sites.google.com/site/alexeyvsmolin/

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