Markets for Data

Alessandro Bonatti and Dirk Bergemann

No 538, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: We develop a model of data provision and data pricing in an environment with strategically interacting firms. The demand for data is generated by firms which seek to tailor their product positioning, or price, to either the individual or the aggregate demand. In turn, the data provider determines the amount of information released to the individual firms and the price to access it. We derive the optimal information and pricing policy of the data provider, under either individual or aggregate tailoring by the firms. We show that frequently the optimal information policy is to provide only partial and noisy information to the competing firms. In addition, the revenue of the data provider is commonly maximized by asymmetric or even exclusive information policies.

Date: 2012
New Economics Papers: this item is included in nep-com, nep-cta and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed012:538

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