Selling less information for more: Garbling with benefits

Thomas A. Weber; David C. Croson

doi:10.1016/j.econlet.2003.11.003

Selling less information for more: Garbling with benefits

Thomas A. Weber, David C. Croson

Research output: Contribution to journal › Article › peer-review

4 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 language	English (US)
Pages (from-to)	165-171
Number of pages	7
Journal	Economics Letters
Volume	83
Issue number	2
DOIs	https://doi.org/10.1016/j.econlet.2003.11.003
State	Published - May 2004
Externally published	Yes

Bibliographical note

Funding Information:
This research was in part supported by the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania and by a David Morgenthaler II Faculty Scholar Award at Stanford University. We would like to thank Rachel Croson, Richard Kihlstrom, Paul Kleindorfer, an anonymous referee, and participants of the 2002 Conference on Economic Design in New York City and the 2003 Spring Meeting of Young Economists in Leuven (Belgium) for helpful suggestions.

Keywords

Garbling
Limited liability
Portfolio investment
Value of information

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10.1016/j.econlet.2003.11.003

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title = "Selling less information for more: Garbling with benefits",

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.",

keywords = "Garbling, Limited liability, Portfolio investment, Value of information",

author = "Weber, {Thomas A.} and Croson, {David C.}",

note = "Funding Information: This research was in part supported by the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania and by a David Morgenthaler II Faculty Scholar Award at Stanford University. We would like to thank Rachel Croson, Richard Kihlstrom, Paul Kleindorfer, an anonymous referee, and participants of the 2002 Conference on Economic Design in New York City and the 2003 Spring Meeting of Young Economists in Leuven (Belgium) for helpful suggestions.",

year = "2004",

month = may,

doi = "10.1016/j.econlet.2003.11.003",

language = "English (US)",

volume = "83",

pages = "165--171",

journal = "Economics Letters",

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publisher = "Elsevier B.V.",

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T2 - Garbling with benefits

AU - Weber, Thomas A.

AU - Croson, David C.

N1 - Funding Information: This research was in part supported by the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania and by a David Morgenthaler II Faculty Scholar Award at Stanford University. We would like to thank Rachel Croson, Richard Kihlstrom, Paul Kleindorfer, an anonymous referee, and participants of the 2002 Conference on Economic Design in New York City and the 2003 Spring Meeting of Young Economists in Leuven (Belgium) for helpful suggestions.

PY - 2004/5

Y1 - 2004/5

N2 - 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.

AB - 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.

KW - Garbling

KW - Limited liability

KW - Portfolio investment

KW - Value of information

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VL - 83

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JO - Economics Letters

JF - Economics Letters

IS - 2

ER -

Selling less information for more: Garbling with benefits

Abstract

Bibliographical note

Keywords

Publisher link

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