Title

Selling Experiments: Menu Pricing of Information

Document Type

Discussion Paper

Publication Date

7-1-2014

CFDP Number

1952

CFDP Pages

34

Abstract

A monopolist sells informative experiments to heterogeneous buyers. Buyers differ in their prior information, and hence in their willingness to pay for additional signals. The monopolist can profitably offer a menu of experiments. We show that, even under costless information acquisition and free degrading of information, the optimal menu is quite coarse. The seller offers at most two experiments, and we derive conditions under which at vs. discriminatory pricing is optimal.

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