The Production of Information to Price Discriminate

Willy Lefez
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Willy Lefez: Humboldt Universität

No 535, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We study price discrimination by a monopolistic seller that endogenously produces a market segmentation at a cost, and question the efficiency of the production of market segmentations led by private incentives. We show that the efficient market segmentation gives all the gains in total surplus to the buyer, and the seller profit stays at the uniform profit level. Our result suggests that the private production of information by sellers to price discriminate is significantly inefficient.

Keywords: Price Discrimination, Cost of Information, Production of Information.; cost of information; production of information (search for similar items in EconPapers)
JEL-codes: D42 D83 L12 (search for similar items in EconPapers)
Date: 2025-07-02
New Economics Papers: this item is included in nep-com, nep-des and nep-mic
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