Disclosure and Pricing of Attributes

31 Pages Posted: 4 Oct 2017

See all articles by Alex Smolin

Alex Smolin

University of Toulouse 1 - Toulouse School of Economics (TSE)

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Date Written: October 3, 2017

Abstract

A monopolist seller owns an object that has several attributes. A buyer is privately informed about his tastes and uncertain about the attributes. The seller can disclose attribute information to the buyer in a form of a statistical experiment. The seller offers a menu of call options varying in upfront payments, experiments, and strike prices. I study revenue-maximizing menus and show that optimal experiments belong to a simple class of linear disclosures. I fully characterize an optimal menu for a class of single-minded buyers. Surprisingly, the menu is nondiscriminatory and can be implemented by a single partial disclosure followed by a posted price.

Keywords: Attributes, Information Design, Mechanism Design, Private Disclosure, Call Options, Multidimensional Screening, Demand Transformation

JEL Classification: D42, D82, D83

Suggested Citation

Smolin, Alex, Disclosure and Pricing of Attributes (October 3, 2017). Available at SSRN: https://ssrn.com/abstract=3047028 or http://dx.doi.org/10.2139/ssrn.3047028

Alex Smolin (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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