Exclusive Data, Price Manipulation and Market Leadership
Leonardo Madio () and
Carlo Reggiani ()
No 7853, CESifo Working Paper Series from CESifo
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)
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-law, nep-mic and nep-mkt
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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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