DP16707 Score Disclosure

Author(s): Levent Celik, Mikhail Drugov
Publication Date: November 2021
Keyword(s): Monopoly, multidimensional types, Quality uncertainty, verifiable information disclosure
JEL(s): D82, D83, L12, L15
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16707

We study verifiable disclosure by a monopolist when the product has multiple quality attributes. We identify an equilibrium in which the firm discloses a score---the average of the qualities---without revealing any further information. While full unraveling is still an equilibrium, it is dominated by the score equilibrium in terms of ex ante as well as ex post profits. Moreover, it is ``defeated'' by the score equilibrium.