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Selling Cookies

Dirk Bergemann () and Alessandro Bonatti ()

No 1920R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We analyze data pricing and targeted advertising. Advertisers seek to tailor their spending to the value of each consumer. A monopolistic data provider sells cookies. informative signals about individual consumers' preferences. We characterize the set of consumers targeted by the advertisers and the optimal monopoly price of cookies. The ability to influence the composition of the targeted set provides incentives to lower prices. Thus, the price of data decreases with the reach of the database and increases with the fragmentation of data sales. We characterize the optimal policy for selling information and its implementation through nonlinear pricing of cookies.

Keywords: Data providers; Information sales; Targeting; Online advertising; Media markets (search for similar items in EconPapers)
JEL-codes: D44 D82 D83 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2013-10, Revised 2013-11
New Economics Papers: this item is included in nep-com, nep-cta, nep-ict and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
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Related works:
Journal Article: Selling Cookies (2015) Downloads
Working Paper: Selling Cookies (2014) Downloads
Working Paper: Selling Cookies (2014) Downloads
Working Paper: Selling Cookies (2013) Downloads
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