Consider the following situation. There are two parties, a buyer who is interested in one unit of a specific good, and a seller who can produce this good for the buyer. While producing the good, the seller can exert more or less unobservable effort (hidden action). When the buyer sees the...

A buyer and a seller can exchange one unit of an indivisible good. While producing the good, the seller can exert unobservable effort (hidden action). Then the buyer realizes whether his valuation is high or low, which stochastically depends upon the seller's effort level (hidden information)....

Consider a revenue-maximizing seller who can sell an object to one of n potential buyers. Each buyer either has hard information about his valuation (i.e., evidence that cannot be forged) or is ignorant. The optimal mechanism is characterized. It turns out that more ignorance can increase the...