Exclusive Data, Price Manipulation and Market Leadership

Yiquan Gu, Leonardo Madio () and Carlo Reggiani

No 7853, CESifo Working Paper Series from CESifo

Abstract: The unprecedented access of firms to consumer level data not only facilitates more precisely targeted individual pricing but also alters firms’ strategic incentives. We show that exclusive access to a list of consumers can provide incentives for a firm to endogenously assume the price leader’s role, and so to strategically manipulate its rival’s price. Prices and profits are non-monotonic in the length of the consumer list. For an intermediate size, price leadership entails a semi-collusive outcome, characterized by supra-competitive prices and low consumer surplus. In contrast, for short or long lists of consumers, exclusive data availability intensifies market competition.

Keywords: exclusive data; price leadership; personalized pricing; price discrimination (search for similar items in EconPapers)
JEL-codes: D43 K21 L11 L13 L41 L86 M21 M31 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-law, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Exclusive Data, Price Manipulation and Market Leadership (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7853

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