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Market Segmentation Through Information
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Authors
Elliott, M.
Galeotti., A.
Koh., A.
Abstract
Prodigious amounts of data are being collected by internet companies about their users' preferences. We consider the information design problem of how to share this information with traditional companies which, in turn, compete on price by offering personalised discounts to customers. We provide a necessary and sufficient condition under which the internet company is able to perfectly segment and monopolise all such markets. This condition is surprisingly mild, and suggests room for regulatory oversight.
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Information design, market segmentation, price discrimination
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Faculty of Economics, University of Cambridge