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Price discrimination and targeted advertising: a welfare analysis

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Abstract

We present a monopolistic model of price discrimination by means of targeted informative advertising. Targeting is defined as the ability of the monopolistic to direct messages with differentiated contents to groups of buyers with different valuations for the good. We show that only if targeting is perfect will the monopolistic behave in a socially desirable way.

Suggested Citation

  • Rosa Branca Esteves & Paulo Guimaraes, 2000. "Price discrimination and targeted advertising: a welfare analysis," NIMA Working Papers 4, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    • Handle: RePEc:nim:nimawp:4/2000
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    Cited by:

    1. Anabela Botelho & Ligia Costa Pinto, 2002. "Hypothetical, real, and predicted real willingness to pay in open-ended surveys: experimental results," Applied Economics Letters, Taylor & Francis Journals, vol. 9(15), pages 993-996.
    2. Aslan Zorlu & Joop Hartog, 2005. "The effect of immigration on wages in three european countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(1), pages 113-151, December.
    3. Paulo Guimarães, 2002. "The state of Portuguese research in economics: an analysis based on publications in international journals," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 1(1), pages 3-25, March.
    4. Botelho, Anabela & Pinto, Ligia Costa, 2004. "Students' expectations of the economic returns to college education: results of a controlled experiment," Economics of Education Review, Elsevier, vol. 23(6), pages 645-653, December.
    5. Pinto, Ligia M. & Harrison, Glenn W., 2003. "Multilateral negotiations over climate change policy," Journal of Policy Modeling, Elsevier, vol. 25(9), pages 911-930, December.
    6. Anabela Botelho, 2001. "Strategic behavior at trial-The production, reporting, and evaluation of complex evidence," NIMA Working Papers 14, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    7. Joao Cerejeira da Silva, 2002. "Identification of the Portuguese industrial districts," NIMA Working Papers 17, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    8. Elvira Lima & Teresa J. Esquerdo, 2003. "The economic costs of alcohol misuse in Portugal," NIMA Working Papers 24, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    9. Pedro Portugal & Ana Rute Cardoso, 2001. "Disentangling the minimum wage puzzle: an analysis of job accessions and separations from a longitudinal matched employer- employee data set," NIMA Working Papers 9, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    10. Ana Rute Cardoso & Priscila Ferreira, 2009. "The dynamics of job creation and destruction for university graduates: why a rising unemployment rate can be misleading," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2513-2521.
    11. Elvira Lima & David K. Whynes, 2003. "Finance and performance of Portuguese hospitals," NIMA Working Papers 20, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
    12. Anabela Botelho & Lígia Costa Pinto & Miguel Portela & Antonio Silva, 2001. "The determinants of success in university entrance," NIMA Working Papers 13, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.

    More about this item

    Keywords

    informative advertising; targeting; price discrimination;
    All these keywords.

    JEL classification:

    • 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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