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We study efficient and buyer-surplus maximizing information policies in
a bilateral trade setting where the buyer is initially privately imperfectly informed
about his willingness to pay. We identify a canonical class of demand
functions that can be implemented by information disclosures that are targeted
based on the buyer’s initial private information. As an application we
show that providing more information to the buyer can lead to higher market
prices and a lower trade probability without affecting the buyer or seller
surplus.
