CFDP 2049R

Author(s): 
CFDP Title: 

The Design and Price of Information


Publication Date: July, 2016

Revised: June, 2017

Pages: 62pp

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 Classifications: 
JEL Classification: 
D42, D82, D83