Online Privacy and Price Discrimination

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Online Privacy and Price Discrimination July , 2010

When a firm is able to recognize its previous customers, it may use information about their purchase histories to price discriminate. We analyze a model with a monopolist and a continuum of heterogeneous consumers, where consumers are able to maintain their anonymity and avoid being identified as past customers, possibly at an (exogenous) cost. When consumers can costlessly maintain their anony...

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In many instances of price discrimination, a seller of an item is in possession of signals from competing buyers regarding their private valuation for the item. While intuition may suggest that a seller should always exploit all available information, our paper shows that it is actually in the interests of the seller to strategically ignore the information contained in the signals with positive...

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Consumers value keeping some information about them private from potential marketers. E-commerce dramatically increases the potential for marketers to accumulate otherwise private information about potential customers. Online marketers claim that this information enables them to better market their products. Policy makers are currently drafting rules to regulate the way in which these marketers...

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ژورنال

عنوان ژورنال: SSRN Electronic Journal

سال: 2010

ISSN: 1556-5068

DOI: 10.2139/ssrn.1695143