Contracts to Sell Information

When information is sold, there is often a reliability problem since anyone can claim to have superior knowledge. Optimal strategies which allow a seller to establish he's informed are considered in a standard one-period, two asset model. When risk aversion is unobservable, an information market is viable and both the seller and buyers are better off participating. However, the seller cannot obtain the full value of his information because of the reliability problem. This provides an opportunity for intermediation since an intermediary may be able to capture some of the remaining value. 

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