Disclosure and Pricing of Attributes
31 Pages Posted: 4 Oct 2017
Date Written: October 3, 2017
A monopolist seller owns an object that has several attributes. A buyer is privately informed about his tastes and uncertain about the attributes. The seller can disclose attribute information to the buyer in a form of a statistical experiment. The seller offers a menu of call options varying in upfront payments, experiments, and strike prices. I study revenue-maximizing menus and show that optimal experiments belong to a simple class of linear disclosures. I fully characterize an optimal menu for a class of single-minded buyers. Surprisingly, the menu is nondiscriminatory and can be implemented by a single partial disclosure followed by a posted price.
Keywords: Attributes, Information Design, Mechanism Design, Private Disclosure, Call Options, Multidimensional Screening, Demand Transformation
JEL Classification: D42, D82, D83
Suggested Citation: Suggested Citation