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THE VALUE OF PRIVATE INFORMATION IN MONOPOLY *
Author(s) -
SAAK ALEXANDER E.
Publication year - 2008
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.1467-6451.2008.00337.x
Subject(s) - monopoly , private information retrieval , incentive , microeconomics , value (mathematics) , product (mathematics) , willingness to pay , business , information asymmetry , economics , value of information , mathematical economics , computer science , computer security , mathematics , machine learning , geometry
We investigate a basic question about a monopoly with incomplete information: when does the seller have an incentive to allow potential buyers to acquire more private information about their tastes for the seller's product? Under plausible conditions such as log‐concave density of willingness‐to‐pay and convex marginal cost, the seller prefers that the paying customers be well informed as a group but be left in the dark regarding their individual tastes.