Selling less information for more: Garbling with benefits

Thomas A. Weber, David C. Croson

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

The expected value of information in a standard portfolio investment problem with ex-post payment can increase when the information is garbled prior to its sale. Distorting the information helps to resolve the incentive problem decreasing the buyer's default risk and thereby increasing the seller's expected revenues.

Original languageEnglish (US)
Pages (from-to)165-171
Number of pages7
JournalEconomics Letters
Volume83
Issue number2
DOIs
StatePublished - May 2004
Externally publishedYes

Keywords

  • Garbling
  • Limited liability
  • Portfolio investment
  • Value of information

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