Price discrimination via information provision

نویسندگان

  • Se Hoon Bang
  • Jaesoo Kim
چکیده

We study price discrimination where different prices are offered as a bundle with different levels of information about a product. The seller’s price discrimination induces high valuation buyers to purchase a good without information and low valuation buyers to purchase with information. Our analysis highlights several interesting results about price discrimination: (i) the seller’s choice of information provision is the combination of full information and no information, (ii) products can be cheaper without information provision than with information provision, (iii) as a result of price discrimination, prices can be more dispersed as buyers’ valuations become largely similar, and (iv) the high valuation buyers purchase a damaged good and may earn negative surplus. Furthermore, we investigate under which circumstances price discrimination is more profitable than uniform pricing. We show that a decline in transportation costs which facilitate price discrimination can be welfare reducing. 2013 Elsevier B.V. All rights reserved.

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عنوان ژورنال:
  • Information Economics and Policy

دوره 25  شماره 

صفحات  -

تاریخ انتشار 2013