Market segmentation through information
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Authors
Elliott, M.
Galeotti., A.
Koh., A,
Li, W.
Publication Date
2021-01-14Series
Cambridge Working Papers in Economics
Publisher
Faculty of Economics, University of Cambridge
Type
Working Paper
Previous Version(s)
Metadata
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Elliott, M., Galeotti., A., Koh., A., & Li, W. (2021). Market segmentation through information. https://doi.org/10.17863/CAM.79761
Abstract
An information designer has precise information about consumers' preferences over products sold by oligopolists. The designer chooses what information to reveal to differentiated firms who, then, compete on price by making personalized offers. We ask what market outcomes the designer can achieve. The information designer is a metaphor for an internet platform who collects data about users and sells it to firms who can, in turn, target discounts and promotions towards different consumers. Our analysis provides new benchmarks demonstrating the power that users' data can endow internet platforms with. These benchmarks speak directly to current regulatory debates.
Keywords
Information design, market segmentation, price discrimination
Identifiers
CWPE2105
This record's DOI: https://doi.org/10.17863/CAM.79761
This record's URL: https://www.repository.cam.ac.uk/handle/1810/332315
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