  A seller offers a buyer a schedule of transfers and associated product
qualities. After observing this schedule, the buyer chooses a flexible costly
signal about his type. We show it is without loss to focus on a class of
mechanisms that compensate the buyer for his learning costs. Using these
mechanisms, we prove that when marginal costs of quality are strictly
increasing, quality always lies strictly below the efficient level at all types
strictly below the highest possible type under the prior. When learning costs
are sufficiently steep, it follows the monopolist optimum distorts quality
downward even "at the top" of the buyer's chosen signal structure. Moreover,
when marginal costs of quality are constant, interior buyer types obtain
interior qualities. These results stand in contrast to the exogenous
information case, which features "no distortion at the top" when marginal
production costs are increasing, and serving the maximal quality to all types
above some threshold when marginal product costs are constant. We also show
that when learning costs are steep, the monopolist finds it optimal to offer a
simple menu that contains at most two purchasing options. Under appropriate
curvature conditions, offering a single purchasing option is optimal.
