TY - RPRT A1 - Strausz, Roland T1 - Correlation-Savvy Sellers T2 - Berlin School of Economics Discussion Papers N2 - A multi-product monopolist sells sequentially to a buyer who privately learns his valuations. Using big data, the monopolist learns the intertemporal correlation of the buyer’s valuations. Perfect price discrimination is generally unattainable—even when the seller learns the correlation perfectly, has full commitment, and in the limit where the consumption good about which the buyer has ex ante private information becomes insignificant. This impossibility is due to informational externalities which requires information rents for the buyer’s later consumption. These rents induce upward and downward distortions, violating the generalized no distortion at the top principle of dynamic mechanism design. T3 - Berlin School of Economics Discussion Papers - 16 Y1 - 2023 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-49605 UR - https://berlinschoolofeconomics.de/insights/bse-discussion-papers U6 - https://doi.org/10.48462/opus4-4960 ET - No. 16 ER - TY - RPRT A1 - Pollrich, Martin A1 - Strausz, Roland T1 - The irrelevance of fee structures for certification T2 - Berlin School of Economics Discussion Papers N2 - In models of certification possible restrictions on the nature of the fee structures are commonly analyzed. We show that they are irrelevant for the certifier’s ability to maximize profits and trade efficiency. Our results establish that certification schemes involve two substitutable dimensions—the fee structure and the disclosure rule. In the context of a canonical unit good certification setup, these dimensions act as perfect substitutes for achieving trade efficiency and (monotone) distributions of rents; adjustments in the disclosure dimension can fully mitigate restrictions in the fee dimension, but these changes do affect market transparency. T3 - Berlin School of Economics Discussion Papers - 17 Y1 - 2023 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-49724 UR - https://berlinschoolofeconomics.de/insights/bse-discussion-papers U6 - https://doi.org/10.48462/opus4-4972 ET - No. 17 ER - TY - RPRT A1 - Schweighofer-Kodritsch, Sebastian A1 - Strausz, Roland T1 - Principled Mechanism Design with Evidence T2 - Berlin School of Economics Discussion Papers N2 - We cast mechanism design with evidence in the framework of Myerson (1982), whereby his generalized revelation principle directly applies and yields standard notions of incentive compatible direct mechanisms. Their specific nature depends on whether the agent's (verifiable) presentation of evidence is contractually controllable, however. For deterministic implementation, we show that, in general, such control has value, and we offer two independent conditions under which this value vanishes, one on evidence (WET) and another on preferences (TIWO). Allowing for fully stochastic mechanisms, we also show how randomization generally has value and clarify to what extent this value vanishes under the common assumption of evidentiary normality (NOR). While, in general, the value of control extends to stochastic implementation, neither control nor randomization have any value if NOR holds together with WET or TIWO. T3 - Berlin School of Economics Discussion Papers - 30 KW - Mechanism Design KW - Revelation Principle KW - Evidence KW - Verifiable Information KW - Value of Control KW - Value of Randomization Y1 - 2023 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-52074 UR - https://berlinschoolofeconomics.de/insights/discussion-papers U6 - https://doi.org/10.48462/opus4-5207 ET - No. 30 ER - TY - RPRT A1 - Strausz, Roland T1 - Consumer Consent Regulation T2 - Berlin School of Economics Discussion Papers N2 - Consumer consent regulation is the cornerstone of modern data privacy regulation such as the European GDPR and the Californian CCPA. By ensuring that consumers can reject any harmful data collection, the regulation seems an effective tool for protecting consumers against price discrimination. By contrast, I provide the insight that consent regulation alone is ineffective because it provides firms with the loophole to commit to unattractive offers to dissenting consumers. Effective consent regulation therefore requires an explicit regulation of the firm's dissent offer. This is informationally demanding; regulation that merely insists on ``reasonable'' (sequential rational) offers is ineffective. T3 - Berlin School of Economics Discussion Papers - 53 Y1 - 2024 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-56546 UR - https://berlinschoolofeconomics.de/insights/discussion-papers U6 - https://doi.org/10.48462/opus4-5654 ET - No. 53 ER - TY - RPRT A1 - Celik, Gorkem A1 - Strausz, Roland T1 - Selling Certification of Private and Market Information T2 - Berlin School of Economics Discussion Papers N2 - We consider a monopolistic certifier selling certification services to a partially privately informed seller. The certifier can enable the seller to disclose her private information publicly, as well as gather additional market information about the good's quality publicly. We show that the certifier's optimal contract exhibits maximal disclosure but non-maximal information-gathering. Thus, optimal contracts eliminate private information but not market uncertainty; even though the latter would be costless, it is suboptimal as it requires excessive information rents to the seller. Thus, market inefficiencies remain due to market uncertainty but not due to private information. T3 - Berlin School of Economics Discussion Papers - 45 Y1 - 2024 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-55762 UR - https://berlinschoolofeconomics.de/insights/discussion-papers U6 - https://doi.org/10.48462/opus4-5576 ET - No. 45 ER -