Voluntary Disclosure and Personalized Pricing

S. Nageeb Ali, Greg Lewis and Shoshana Vasserman
Additional contact information
S. Nageeb Ali: Pennsylvania State University
Greg Lewis: Microsoft Research

Research Papers from Stanford University, Graduate School of Business

Abstract: Firms have ever increasing access to consumer data, which they use to personalize their advertising and to price discriminate. This raises privacy concerns. Policymakers have argued in response that consumers should be given control over their data, able to choose what to share and when. Since firms learn about a consumer’s preferences both from what they do and do not disclose, the equilibrium implications of consumer control are unclear. We study whether such measures improve consumer welfare in monopolistic and in competitive markets. We find that consumer control can improve consumer welfare relative to both perfect price discrimination and uniform pricing. First, consumers can use disclosure to amplify competitive forces. Second, consumers can disclose information to induce even a monopolist to lower prices. Whether consumer control improves welfare depends on the disclosure technology and market competitiveness. Simple disclosure technologies suffice in competitive markets. When facing a monopolist, a consumer needs partial disclosure possibilities to obtain any welfare gains.

JEL-codes: D4 D8 (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-com, nep-mic and nep-reg
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Citations: View citations in EconPapers (4)

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https://www.gsb.stanford.edu/faculty-research/work ... personalized-pricing

Related works:
Journal Article: Voluntary Disclosure and Personalized Pricing (2023)
Working Paper: Voluntary Disclosure and Personalized Pricing (2020)
Working Paper: Voluntary Disclosure and Personalized Pricing (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3890

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