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Consumer Privacy and the Incentives to Price-Discriminate in Online Markets
Review of Network Economics ( IF 0.9 ) Pub Date : 2017-09-26 , DOI: 10.1515/rne-2018-0004
Alexandre de Cornière , Rodrigo Montes

This paper studies how product customization and consumer privacy affect amonopolist’s incentives to engage in perfect price discrimination.We consider a monopolist that faces an ex ante choice to commit to price discrimination or to a uniform price. We introduce a simple model in which a monopolist can use analytics to access consumer data to both price-discriminate and offer customized products. In turn, consumers can protect their privacy to avoid price discrimination at a cost. By committing not to price-discriminate, the firm induces consumers to not protect their data, which allows it to customize the product. It can then extract the extra value through an increased uniform price. This strategy is profitable when the value added through customization is sufficiently high. An intermediate quality of analytics gives the monopolist more incentives to set a uniform price.

中文翻译:

消费者隐私权和在线市场中的价格歧视动机

本文研究了产品定制和消费者隐私如何影响垄断者进行完美价格歧视的动机。我们认为垄断者面临着事先做出选择以实施价格歧视或统一价格的选择。我们介绍了一个简单的模型,在该模型中,垄断者可以使用分析来访问消费者数据以区分价格和提供定制产品。反过来,消费者可以保护自己的隐私,从而避免付出一定代价进行价格歧视。通过承诺不歧视价格,该公司诱使消费者不保护其数据,从而允许其定制产品。然后,它可以通过提高统一价格来提取额外的价值。当通过定制增加的价值足够高时,此策略将有利可图。
更新日期:2017-09-26
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