American Economic Review Vol. 108 No. 1 2018
The Design and Price of Information
open access
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.
- DOI
- 10.1257/aer.20161079
- Volume
- 108
- Issue
- 1
- Pages
- 1-48
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref