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Selling Cookies

Dirk Bergemann () and Alessandro Bonatti ()

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

Abstract: We propose a model of data provision and data pricing. A single data provider controls a large database that contains information about the match value between individual consumers and individual firms (advertisers). Advertisers seek to tailor their spending to the individual match value. The data provider prices queries about individual consumers' characteristics (cookies). We determine the equilibrium data acquisition and pricing policies. Advertisers choose positive and/or negative targeting policies. The optimal query price influences the composition of the targeted set. The price of data decreases with the reach of the database and increases with the fragmentation of data sales.

Keywords: Data providers; Data pricing; Selling information; Targeting; Online advertising; Cookies; Media markets (search for similar items in EconPapers)
JEL-codes: D44 D82 D83 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-10, Revised 2014-09
New Economics Papers: this item is included in nep-com, nep-cta, nep-ict and nep-mkt
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Published in American Economic Journal: Microeconomics (August 2015), 7(3): 259-294

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http://cowles.yale.edu/sites/default/files/files/pub/d19/d1920-r2.pdf (application/pdf)

Related works:
Journal Article: Selling Cookies (2015) Downloads
Working Paper: Selling Cookies (2014) Downloads
Working Paper: Selling Cookies (2013) Downloads
Working Paper: Selling Cookies (2013) Downloads
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