Markets for Information: An Introduction

32 Pages Posted: 29 Aug 2018

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

Multiple version iconThere are 2 versions of this paper

Date Written: August 27, 2018

Abstract

We survey a recent and growing literature on markets for information. We offer a comprehensive view of information markets through an integrated model of consumers, information intermediaries, and firms. The model embeds a large set of applications ranging from sponsored search advertising to credit scores to information sharing among competitors. We then review a mechanism design approach to selling information in greater detail. We distinguish between ex ante sales of information (the buyer acquires an information structure) and ex post sales (the buyer pays for specific realizations). We relate this distinction to the different products that brokers, advertisers, and publishers use to trade consumer information online. We discuss the endogenous limits to the trade of information that derive from its potential adverse use for consumers. Finally, we revisit the role of recommender systems and artificial intelligence systems as markets for indirect information.

JEL Classification: Information markets, Information design, Intermediaries, Mechanism design, Predictions, ratings

Suggested Citation

Bergemann, Dirk and Bonatti, Alessandro, Markets for Information: An Introduction (August 27, 2018). Cowles Foundation Discussion Paper No. 2142. Available at SSRN: https://ssrn.com/abstract=3240310 or http://dx.doi.org/10.2139/ssrn.3240310

Dirk Bergemann (Contact Author)

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

28 Hillhouse Ave
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203-432-3592 (Phone)
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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 )

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E62-416
Cambridge, MA 02142
United States

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