Selling Information while Being an Interested Party
Matteo Castiglioni, Francesco Bacchiocchi, Alberto Marchesi, Giulia, Romano, Nicola Gatti

TL;DR
This paper investigates how an interested seller can optimally sell information to a budget-constrained buyer, considering externalities and the seller's influence on the buyer's actions, with solutions for protocol design.
Contribution
It introduces a model where the seller's utility depends on the buyer's actions, providing polynomial-time algorithms for computing optimal selling protocols.
Findings
Optimal protocols can be computed in polynomial time.
Single-policy protocols have both positive and negative theoretical results.
Abstract
We study the algorithmic problem faced by an information holder (seller) who wants to optimally sell such information to a budged-constrained decision maker (buyer) that has to undertake some action. Differently from previous, we consider the case in which the seller is an interested party, as the action chosen by the buyer does not only influence their utility, but also seller's one. This happens in many real-world settings, where the way in which businesses use acquired information may positively or negatively affect the seller, due to the presence of externalities on the information market. The utilities of both the seller and the buyer depend on a random state of nature, which is revealed to the seller, but it is unknown to the buyer. Thus, the seller's goal is to (partially) sell their information about the state of nature to the buyer, so as to concurrently maximize revenue and…
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Taxonomy
TopicsAuction Theory and Applications · Optimization and Search Problems
