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The Limits of Multiproduct Price Discrimination

Author

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  • Nima Haghpanah
  • Ron Siegel

Abstract

We consider a multiproduct seller who has access to information about consumer preferences that he can use for second- and third-degree price discrimination. We characterize markets for which such information can lead to the efficient allocation with consumers obtaining the entire surplus gain relative to the profit-maximizing allocation without the additional information. This benchmark is achievable for all markets with a given set of consumer types if and only if it is optimal for the seller to offer only the best product in each market. Analogous results characterize when the "surplus triangle" of Bergemann, Brooks, and Morris (2015) is achievable.

Suggested Citation

  • Nima Haghpanah & Ron Siegel, 2022. "The Limits of Multiproduct Price Discrimination," American Economic Review: Insights, American Economic Association, vol. 4(4), pages 443-458, December.
    • Handle: RePEc:aea:aerins:v:4:y:2022:i:4:p:443-58
    DOI: 10.1257/aeri.20210426
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    Citations

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    Cited by:

    1. Alessandro Bonatti, 2023. "The Platform Dimension of Digital Privacy," NBER Chapters, in: The Economics of Privacy, National Bureau of Economic Research, Inc.
    2. Alireza Fallah & Michael I. Jordan & Ali Makhdoumi & Azarakhsh Malekian, 2024. "The Limits of Price Discrimination Under Privacy Constraints," Papers 2402.08223, arXiv.org, revised Feb 2024.

    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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