The authors examine the incentive of a seller to allow potential buyers to acquire private information about their tastes for the seller's product. Improved private information for buyers enables the seller to segment the market and charge higher prices to high-value buyers. However, improved information can also provide rents to buyers. In a variety of settings, this tradeoff is optimally resolved at one of two extremes: either buyers are supplied with the best available knowledge of their tastes or no information is supplied by the seller. Copyright 1994 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
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repec:bep:eapcon:v:4:y:2005:i:1:p:1434-1434 is not listed on IDEAS
Heski Bar-Isaac & Guillermo Caruana & Vicente Cunat, 2008.
"Information Gathering and Marketing,"
Working Papers
08-17, New York University, Leonard N. Stern School of Business, Department of Economics.
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