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Selling with evidence

Authors: Koessler, Frédéric; Skreta, Vasiliki;

Selling with evidence

Abstract

We study the informed‐principal problem in a bilateral asymmetric information trading setting with interdependent values and quasi‐linear utilities. The informed seller proposes a mechanism and voluntarily certifies information about the good's characteristics. When the set of certifiable statements is sufficiently rich, we show that there is an ex ante profit‐maximizing selling procedure that is an equilibrium of the mechanism proposal game. In contrast to posted price settings, the allocation obtained when product characteristics are commonly known (the unravelling outcome) may not be an equilibrium allocation, even when all buyer types agree on the ranking of product quality. Our analysis relies on the concept of strong Pareto optimal allocation, which was originally introduced by Maskin and Tirole (1990) in private value environments.

Countries
United Kingdom, France
Keywords

certification, consumer heterogeneity, ddc:330, Informed principal, informed principal, mechanism design, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, Resource and cost allocation (including fair division, apportionment, etc.), Auctions, bargaining, bidding and selling, and other market models, C72, D82, Other game-theoretic models, interdependent valuations, product information disclosure, certification., [SHS.ECO] Humanities and Social Sciences/Economics and Finance

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
11
Top 10%
Average
Top 10%
Green
gold
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INRAE