Document Type
Discussion Paper
Publication Date
7-2022
CFDP Number
2338R2
CFDP Revision Date
September 2023
CFDP Pages
61
Journal of Economic Literature (JEL) Code(s)
D44, D47, D83, D84
Abstract
We consider a general nonlinear pricing environment with private information. The seller can control both the signal that the buyers receive about their value and the selling mechanism. We characterize the optimal menu and information structure that jointly maximize the seller's profit. The optimal screening mechanism has finitely many items even with a continuum of values. We identify sufficient conditions under which the optimal mechanism has a single item. Thus the seller decreases the variety of items below the efficient level in order to reduce the information rents of the buyers.
Recommended Citation
Bergemann, Dirk; Heumann, Tibor; and Morris, Stephen, "Screening with Persuasion" (2022). Cowles Foundation Discussion Papers. 2770.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2770