Working Paper: CEPR ID: DP13148
Authors: Dirk Bergemann; Alessandro Bonatti
Abstract: We survey a recent and growing literature on markets for information. We offera comprehensive view of information markets through an integrated model of consumers,information intermediaries, and rms. The model embeds a large set of applicationsranging from sponsored search advertising to credit scores to informationsharing among competitors. We then review a mechanism design approach to sellinginformation in greater detail. We distinguish between ex ante sales of information(the buyer acquires an information structure) and ex post sales (the buyer pays forspeci c realizations). We relate this distinction to the different products that brokers,advertisers, and publishers use to trade consumer information online. We discuss theendogenous limits to the trade of information that derive from its potential adverseuse for consumers. Finally we revisit the role of recommender systems and arti cialintelligence systems as markets for indirect information.
Keywords: information markets; information design; intermediaries; mechanism design; predictions; ratings
JEL Codes: D42; D82; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| design of information structures (D85) | pricing strategies of firms (L11) |
| number of consumers (D12) | information intermediary filtering noise (D83) |
| quality of information provided (L15) | consumer engagement (D16) |
| potential misuse of information (D83) | consumer willingness to share data (D16) |