Download This PaperThe Design and Price of Information
63 Pages Posted: 6 Jun 2017
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The Design and Price of Information
The Design and Price of Information
The Design and Price of Information
Date Written: June 3, 2017
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.
Keywords: Information design, Price of information, Statistical experiments, Mechanism design, Price discrimination, Hypothesis testing
JEL Classification: D42, D82, D83
Suggested Citation: Suggested Citation
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