COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1743 Selling Information Johannes Hörner and Andrzej Skrzypacz December 2009 We study a dynamic buyer-seller problem in which the good is
information and there are no property rights. The potential buyer is reluctant to pay for
information whose value to him is uncertain, but the seller cannot credibly convey its
value to the buyer without disclosing the information itself. Information comes as
divisible hard evidence. We show how and why the seller can appropriate a substantial
fraction of the value through gradual revelation, and how the entire value can be
extracted with the help of a mediator. |
