The Design and Price of Information
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aer.20161079.pdf
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Author(s)
Bergemann, Dirk
Bonatti, Alessandro
Smolin, Alex
Date Issued
January 2018
Journal
American Economic Review
Publisher
American Economic Association
Citation
Bergemann, Dirk et al. “The Design and Price of Information.” American Economic Review 108, 1 (January 2018): 1–48
Version
Final published version
Abstract
A data buyer faces a decision problem under uncertainty. He can augment his initial private information with supplemental data from a data seller. His willingness to pay for supplemental data is determined by the quality of his initial private information. The data seller optimally offers a menu of statistical experiments. We establish the properties that any revenue-maximizing menu of experiments must satisfy. Every experiment is a non-dispersed stochastic matrix, and every menu contains a fully informative experiment. In the cases of binary states and actions, or binary types, we provide an explicit construction of the optimal menu of experiments.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/AER.20161079
