@article{9e931757dbd34b56bf7cc66808f82dcf,
title = "Monopolistic signal provision",
abstract = "I study a monopolist who sells a signal to a consumer with a hidden type. The consumer uses this signal to obtain social status, defined as the expectation of the consumer's type conditional on the signal. The monopolist must decide how accurately different types are revealed. When pooling subsets of types, she reduces social surplus, but extracts greater information rents. I derive the optimal mechanism by examining the covariance between the consumer's type and his virtual marginal value of social status.",
keywords = "information disclosure, nonlinear pricing, signaling",
author = "Luis Rayo",
note = "Funding Information: Acknowledgments: I am grateful to my Ph.D. advisor Douglas Bernheim for generously guiding this project. I am also grateful to my Ph.D. advisor Jonathan Levin for offering valuable suggestions. (Any errors are my own.) I wish to thank Roger Myerson, Alessandro Pavan, Lars Stole, my editors Armin Schmutzler and Joel Watson, seminar participants at Stanford University, participants at the 2nd Duke-Northwestern-Texas IO Conference, and three anonymous referees for their insightful comments. I gratefully acknowledge financial support from the University of Chicago Booth School of Business, the University of Utah David Eccles School of Business, and the LSE Department of Management. Publisher Copyright: {\textcopyright} 2013 by Walter de Gruyter Berlin / Boston 2013.",
year = "2013",
month = may,
day = "8",
doi = "10.1515/bejte-2012-0003",
language = "English (US)",
volume = "13",
pages = "27--58",
journal = "B.E. Journal of Theoretical Economics",
issn = "1935-1704",
publisher = "Berkeley Electronic Press",
number = "1",
}