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Monopoly price discrimination and privacy: The hidden cost of hiding

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  • Belleflamme, Paul
  • Vergote, Wouter

Abstract

A monopolist can use a ‘tracking’ technology to identify a consumer’s willingness to pay with some probability. Consumers can counteract tracking by acquiring a ‘hiding’ technology. We show that consumers may be collectively better off absent this hiding technology.

Suggested Citation

  • Belleflamme, Paul & Vergote, Wouter, 2016. "Monopoly price discrimination and privacy: The hidden cost of hiding," Economics Letters, Elsevier, vol. 149(C), pages 141-144.
    • Handle: RePEc:eee:ecolet:v:149:y:2016:i:c:p:141-144
    DOI: 10.1016/j.econlet.2016.10.027
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    More about this item

    Keywords

    Price discrimination; Privacy; Monopoly;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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