Market for Information and Selling Mechanisms

David Bounie, Antoine Dubus and Patrick Waelbroeck

No 8307, CESifo Working Paper Series from CESifo

Abstract: We investigate the strategies of a data intermediary selling consumer information to firms for price discrimination purpose. We analyze how the mechanism through which the data intermediary sells information influences how much consumer information she will collect and sell to firms, and how it impacts consumer surplus. We consider three selling mechanisms tailored to sell consumer information: take it or leave it, sequential bargaining, and auctions. We show that the more information the intermediary collects, the lower consumer surplus. Consumer information collection is minimized, and consumer surplus maximized under the take it or leave it mechanism, which is the least profitable mechanism for the intermediary. We discuss two regulatory tools – a data minimization principle and a price cap – that can be used by data protection agencies and competition authorities to limit consumer information collection, increase consumer surplus, and ensure a fair access to information to firms.

Keywords: market for information; competition; price discrimination; data collection; privacy; selling mechanisms (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-com, nep-des and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Market for Information and Selling Mechanisms (2022)
Working Paper: Market for Information and Selling Mechanisms (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8307

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