Reselling information

Information can be simultaneously consumed, replicated, and sold to others. We study how resale affects a decentralized market for information. Even if the initial seller is an informational monopolist, she captures non-trivial rents from at most a single buyer in any Markovian equilibrium: in the frequent-offer limit, her payoffs converge to 0 once a single buyer buys information. By contrast, there exists a non-Markovian “prepay equilibrium” where payment is extracted from most buyers before information is sold. This prepay equilibrium exploits buyers' ability to resell information and results in the seller achieving (approximately) the same payoff that she would were resale prohibited.