Abstract
We study markets for information in the form of Bayesian signals. The main feature of such markets is that information is costly for the seller to acquire and cannot be verified by the buyer. We provide a full characterization of the set of all compensation schemes (viz., menus) which guarantee that the demanded signal will be chosen by the seller. We then show that for all such menus, the seller's surplus will always be strictly positive. This is true even in ideal settings for the buyer (e.g., when the buyer is perfectly informed and has all the strategic power), implying that information is always overpriced irrespective of the market characteristics. This prediction is strikingly distinct from the corresponding one in markets for commodities, and it is attributed to the fact that information is unverifiable