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30.05. Micro Theory Seminar: Navin Kartik

Micro Theory Seminar with Navin Kartik (Columbia University)

Event details
  • Micro Theory Seminar
When May 30, 2018
from 16:30 to 17:45
Where faculty room
Contact Name Stephan Lauermann
Contact Email
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Lemonade from Lemons: Information Design and Adverse Selection

with Weijie Zhong



A buyer makes a take-it-or-leave-it offer to a seller of a single good. It is common knowledge that there are gains from trade, but the two parties’ values may be correlated. We study the set of payoff vectors that can be implemented through joint information design of both parties. We establish, constructively, that the set is characterized by simple feasibility and individual-rationality constraints. We also investigate what is implementable using only information structures in which the seller is more informed than the buyer; alternatively, under a “no signaling” equilibrium restriction. We show that there is then no loss in providing the buyer with no information and only varying the seller’s information. However, except in some notable special cases, these information structures do not implement all payoff vectors—in particular, they do not maximize the seller’s payoff. Our model encompasses monopoly pricing, in which case our results augment those of Bergemann, Brooks, and Morris (AER 2015) and Roesler and Szentes (AER 2017).

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