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Market Segmentation, Information Sale, and Information Foreclosure

Author

Listed:
  • Tarantino, Emanuele
  • Terstiege, Stefan
  • Vigier, Adrien

Abstract

We study the sale of consumer data allowing firms to engage in discriminatory pricing. When information is sold by an independent data intermediary, the resulting consumer surplus is as if all firms were fully informed. We then consider the case in which the seller of information also competes in the goods market, and show that the seller of information may choose not to sell full information to its rivals; this strategic behavior ends up lowering consumer surplus. Lastly, we show that the acquisition of a firm by an independent data intermediary always reduces consumer surplus.

Suggested Citation

  • Tarantino, Emanuele & Terstiege, Stefan & Vigier, Adrien, 2023. "Market Segmentation, Information Sale, and Information Foreclosure," CEPR Discussion Papers 18691, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:18691
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    More about this item

    Keywords

    Market segmentation; consumer data;

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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