Data versus Information Sales under Financial Constraints

Aug 13, 2025

Working Paper No. 00181-00

Share:

icon share X icon share facebook icon share linkedin

We study a dynamic problem of selling data without commitment to a budget-constrained receiver. The sender has access to a data-generating process, informative about a fundamental state, and can sell it either as granular observations (raw data) or summary statistics (information). Properly designed, such statistics ensure the residual uncertainty declines predictably along with the receiver's budget, supporting efficiency under gradual information sales. In contrast, selling raw data poses a risk that future observations increase residual uncertainty, exceeding the receiver's remaining budget. Consequently, selling data is inefficient if the fundamental is discrete and requires excess budget if the fundamental is non-Gaussian.


Dmitry Orlov

Dmitry Orlov

University of Wisconsin

Andrzej Skrzypacz

Andrzej Skrzypacz

Stanford Graduate School of Business

Pavel Zryumov

Pavel Zryumov

University of Rochester