Information and monopolistic pricing

This thesis studies aspects of information revelation in monopoly pricing. It addresses two sets of questions: (i) how does the accuracy of information available to consumers about a product sold by a monopoly affects the monopoly's pricing decisions and the behavior of sophisticated consumers? (ii) how does strategic behavior of agents change when information about the outcome of trade in one monopolistic market is revealed to a second monopolistic seller prior to the latter's pricing decision? how does the outcome of trade in the two markets compare with the outcome of trade when no information is disclosed and how does the order of trade changes the outcomes?; It is shown that when the distribution of consumers' valuations is exogenous, a monopolistic seller prefers either to provide accurate information that will allow consumers to elicit their underlying valuation prior to the purchasing decision or to provide no information at all. When the distribution of consumers' valuations endogenously depends on an unobservable investment decision made by the monopoly, investment increases with the accuracy of information available to consumers and a monopolistic producer will never favor the extreme information structure in which no information is disclosed.; It is shown that when information about the outcome of trade in a first trading market is revealed to a second trading market and the consumers' valuations of the products are positively correlated across markets, then, the first trading monopoly profits are lower than the profits attainable when no information is disclosed. On aggregate, the monopolies are worse off when information 'leaks' across the markets. Under certain assumptions about the distribution of consumers' valuations, it is shown that consumers are better off if they trade first in larger markets and in high variance markets.