Although consumer profiling advocates tout benefits from personalization, consumer advocacy groups oppose profiling in online markets because of concerns about privacy and price discrimination. Policies such as opt-out or opt-in that provide consumers the option to voluntarily participate in profiling are the favored compromise. We compare voluntary profiling to no profiling and show that volun...

Digital technologies have transformed the nature of production and the types of goods and services consumed in modern economies. Yet our measurement framework for economic growth has not fundamentally changed since the 1930s. In principle, a better approach is now feasible. Specifically, changes in consumer surplus (compensating expenditure) are superior to changes in GDP as a measure of change...

We examine the impact of multiproduct nonlinear pricing on profit, consumer surplus and welfare in a duopoly. When consumers buy all their products from one firm (the one-stop shopping model), nonlinear pricing leads to higher profit and welfare, but usually lower consumer surplus, than linear pricing. By contrast, in a unit-demand model where consumers may buy one product from one firm and ano...

Competitive information revealed in a marketplace will have significant impact on the learning ability of the participating sellers across market sessions and therefore, on performance of the marketplace. The marketplace that we study in this paper has the following characteristics: a) Products transacted are custom-built – created specifically for a consumer and cannot be resold to other consu...

An examination of the economic impacts of the diagnosis of Actinobacillus pleuropneumoniae on grower/finisher swine operations indicated that reduced pork production, associated with the diagnosis of A. pleuropneumoniae on the operation, diminished consumer surplus by $53+/-52 million, and resulted in a total loss of $32+/-30 million to the US economy in 1995. Most of the economic surplus lost ...

The valuation of changes in consumption of addictive goods resulting from policy interventions presents a challenge for cost-benefit analysts. Consumer surplus losses from reduced consumption of addictive goods that are measured relative to market demand schedules overestimate the social cost of cessation interventions. This article seeks to show that consumer surplus losses measured using a no...

This paper analyzes a structural microeconomic relation describing the exact consumer surplus in a nonparametric setting with endogenous prices. The exact consumer surplus can be characterized as the solution of a differential equation involving the observed demand function. The strategy put forward in this paper involves two steps: first estimate the demand function with endogeneity using nonp...

Consumers incur many transaction costs in purchasing and using most products. This paper examines the effects of a reduction in such consumer transaction costs caused by market-level technological advances. Using a model in which consumers are simultaneously heterogenous in their transaction costs and in their marginal valuation of product quality, we highlight two mechanisms that can cause suc...