Market Segmentation, Information Sale, and Information Foreclosure

Emanuele Tarantino, Stefan Terstiege and Adrien Vigier

No 18691, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Market segmentation; consumer data (search for similar items in EconPapers)
JEL-codes: D42 D82 (search for similar items in EconPapers)
Date: 2023-12
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