Exclusive Data, Price Manipulation and Market Leadership

Yiquan Gu, Leonardo Madio and Carlo Reggiani

No 202102, Working Papers from University of Liverpool, Department of Economics

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 an equilibrium outcome characterised 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; Personalised pricing; Price leadership; Strategic price manipulation (search for similar items in EconPapers)
JEL-codes: D43 K21 L11 L13 L41 L86 M21 M31 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2021-01
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 (2)

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https://www.liverpool.ac.uk/media/livacuk/schoolof ... arket,Leadership.pdf First version, 2021 (application/pdf)

Related works:
Working Paper: Exclusive Data, Price Manipulation and Market Leadership (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:202102

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