Information revelation and certification intermediaries

Research output: Contribution to journalArticle

194 Scopus citations

Abstract

I discuss the role of intermediaries that search out the information of privately informed parties and then choose what to reveal to uninformed parties. My focus is on the strategic manipulation of information by these certification intermediaries. I show that in a class of environments the optimal choice for a monopoly intermediary is to reveal only whether quality is above some minimal standard. Despite this minimal information transmission, the intermediary can capture a large share of the surplus. I also show that competition among intermediaries can lead to full information revelation.

Original languageEnglish (US)
Pages (from-to)214-231
Number of pages18
JournalRAND Journal of Economics
Volume30
Issue number2
DOIs
StatePublished - 1999

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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