Screening Inattentive Buyers

Jeffrey Mensch*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Information plays a crucial role in mechanism design problems. A potential complication is that buyers may be inattentive, and so their information may endogenously and flexibly depend on the offered mechanism. I show that it is without loss of generality to consider contour mechanisms, which comprise triplets of allocation probabilities, prices, and beliefs, and are uniquely determined by a single such point. The mechanism design problem then reduces to Bayesian persuasion along the optimal contour. This reduction has significant implications for both the implementation of the optimal mechanism and the revenues that can be achieved.

Original languageAmerican English
Pages (from-to)1949-1984
Number of pages36
JournalAmerican Economic Review
Volume112
Issue number6
DOIs
StatePublished - Jun 2022

Bibliographical note

Publisher Copyright:
© 2022 American Economic Association. All rights reserved.

Fingerprint

Dive into the research topics of 'Screening Inattentive Buyers'. Together they form a unique fingerprint.

Cite this