
TL;DR
This paper analyzes how a monopolist can optimally price informational goods by offering a menu of experiments, revealing a trade-off between the buyer's private information and the amount of information provided.
Contribution
It characterizes the profit-maximizing menu of experiments in monopolistic information selling, highlighting the role of buyer's private signals and their impact on optimal information provision.
Findings
Optimal menu includes a continuum of experiments with varying informativeness.
More informative buyer signals lead to more informative experiments in the menu.
The seller can commit to selling any statistical experiment of her binary signal.
Abstract
I consider the monopolistic pricing of informational good. A buyer's willingness to pay for information is from inferring the unknown payoffs of actions in decision making. A monopolistic seller and the buyer each observes a private signal about the payoffs. The seller's signal is binary and she can commit to sell any statistical experiment of her signal to the buyer. Assuming that buyer's decision problem involves rich actions, I characterize the profit maximizing menu. It contains a continuum of experiments, each containing different amount of information. I also find a complementarity between buyer's private information and information provision: when buyer's private signal is more informative, the optimal menu contains more informative experiments.
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