IDEAS home Printed from https://ideas.repec.org/a/eee/indorg/v103y2025ipas016771872500013x.html

Data brokers competition, synergic datasets, and endogenous information value

Author

Listed:
  • Abrardi, Laura
  • Cambini, Carlo
  • Pino, Flavio

Abstract

Data Brokers (DBs) aggregate vast amounts of data and sell them to downstream firms for customer profiling. Firms can decide to purchase data from multiple DBs, to leverage synergies that enhance profiling accuracy. We study how competition between DBs and the synergies between their datasets influence the price and quantity of data sold, and the effects in the downstream market in terms of prices and incentives to purchase from multiple DBs. We find that DBs can coordinate over the quantity and price of data sold to endogenously increase the value of data synergies and induce firms to purchase multiple datasets, even when synergies are relatively weak. As synergies increase, DBs reduce the quantity of data to temper downstream competition and charge higher prices for the data. If the number of firms is endogenous, higher data prices lead to reduced market entry and consumer harm.

Suggested Citation

  • Abrardi, Laura & Cambini, Carlo & Pino, Flavio, 2025. "Data brokers competition, synergic datasets, and endogenous information value," International Journal of Industrial Organization, Elsevier, vol. 103(PA).
    • Handle: RePEc:eee:indorg:v:103:y:2025:i:pa:s016771872500013x
    DOI: 10.1016/j.ijindorg.2025.103146
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016771872500013X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijindorg.2025.103146?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Andrei Hagiu & Julian Wright, 2023. "Data‐enabled learning, network effects, and competitive advantage," RAND Journal of Economics, RAND Corporation, vol. 54(4), pages 638-667, December.
    2. Yiquan Gu & Leonardo Madio & Carlo Reggiani, 2022. "Data brokers co-opetition [The impact of big data on firm performance: an empirical investigation]," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 820-839.
    3. Rodrigo Montes & Wilfried Sand-Zantman & Tommaso Valletti, 2019. "The Value of Personal Information in Online Markets with Endogenous Privacy," Management Science, INFORMS, vol. 65(3), pages 1342-1362, March.
    4. Nico Neumann & Catherine E. Tucker & Timothy Whitfield, 2019. "Frontiers: How Effective Is Third-Party Consumer Profiling? Evidence from Field Studies," Marketing Science, INFORMS, vol. 38(6), pages 918-926, November.
    5. Qihong Liu & Konstantinos Serfes, 2004. "Quality of Information and Oligopolistic Price Discrimination," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 671-702, December.
    6. Tobias J. Klein & Madina Kurmangaliyeva & Jens Prufer & Patricia Prufer, 2022. "How important are user-generated data for search result quality? Experimental evidence," University of East Anglia School of Economics Working Paper Series 2022-07, School of Economics, University of East Anglia, Norwich, UK..
    7. Paul Belleflamme & Wing Man Wynne Lam & Wouter Vergote, 2019. "Competitive Imperfect Price Discrimination and Market Power," CESifo Working Paper Series 7964, CESifo.
    8. Diego Aparicio & Zachary Metzman & Roberto Rigobon, 2021. "The Pricing Strategies of Online Grocery Retailers," NBER Working Papers 28639, National Bureau of Economic Research, Inc.
    9. Greg Shaffer & Z. John Zhang, 1995. "Competitive Coupon Targeting," Marketing Science, INFORMS, vol. 14(4), pages 395-416.
    10. Dirk Bergemann & Alessandro Bonatti & Alex Smolin, 2018. "The Design and Price of Information," American Economic Review, American Economic Association, vol. 108(1), pages 1-48, January.
    11. Zhijun Chen & Chongwoo Choe & Noriaki Matsushima, 2020. "Competitive Personalized Pricing," Management Science, INFORMS, vol. 66(9), pages 4003-4023, September.
    12. Shota Ichihashi, 2021. "Competing data intermediaries," RAND Journal of Economics, RAND Corporation, vol. 52(3), pages 515-537, September.
    13. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    14. Ganesh Iyer & David Soberman & J. Miguel Villas-Boas, 2005. "The Targeting of Advertising," Marketing Science, INFORMS, vol. 24(3), pages 461-476, May.
    15. Thisse, Jacques-Francois & Vives, Xavier, 1988. "On the Strategic Choice of Spatial Price Policy," American Economic Review, American Economic Association, vol. 78(1), pages 122-137, March.
    16. Taylor, Curtis & Wagman, Liad, 2014. "Consumer privacy in oligopolistic markets: Winners, losers, and welfare," International Journal of Industrial Organization, Elsevier, vol. 34(C), pages 80-84.
    17. Hemant Bhargava & Antoine Dubus & David Ronayne & Shiva Shekhar, 2026. "The Strategic Value of Data Sharing in Interdependent Markets," Management Science, INFORMS, vol. 72(2), pages 1472-1488, February.
    18. Paul Belleflamme & Wing Man Wynne Lam, & Wouter Vergote, 2020. "Competitive Imperfect Price Discrimination and Market Power," Marketing Science, INFORMS, vol. 39(5), pages 996-1015, September.
    19. David Bounie & Antoine Dubus & Patrick Waelbroeck, 2021. "Competition and Mergers with Strategic Data Intermediaries," CESifo Working Paper Series 9339, CESifo.
    20. Lepp l , Samuli, 2013. "Arrow's paradox and markets for nonproprietary information," Cardiff Economics Working Papers E2013/2, Cardiff University, Cardiff Business School, Economics Section.
    21. Laura Abrardi & Carlo Cambini & Raffaele Congiu & Flavio Pino, 2024. "User Data and Endogenous Entry in Online Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 72(3), pages 1052-1088, September.
    22. Patrick Bajari & Victor Chernozhukov & Ali Hortaçsu & Junichi Suzuki, 2019. "The Impact of Big Data on Firm Performance: An Empirical Investigation," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 33-37, May.
    23. J. Miguel Villas-Boas, 2004. "Consumer Learning, Brand Loyalty, and Competition," Marketing Science, INFORMS, vol. 23(1), pages 134-145, December.
    24. Andrew Rhodes & Jidong Zhou, 2024. "Personalized Pricing and Competition," American Economic Review, American Economic Association, vol. 114(7), pages 2141-2170, July.
    25. Delbono, Flavio & Reggiani, Carlo & Sandrini, Luca, 2024. "Strategic data sales with partial segment profiling," Information Economics and Policy, Elsevier, vol. 68(C).
    26. David Bounie & Antoine Dubus & Patrick Waelbroeck, 2022. "Collecting and Selling Consumer Information: Selling Mechanisms Matter," Working Papers hal-02288708, HAL.
    27. Samuli Leppälä, 2015. "Economic Analysis Of Knowledge: The History Of Thought And The Central Themes," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 263-286, April.
    28. David Bounie & Antoine Dubus & Patrick Waelbroeck, 2021. "Selling strategic information in digital competitive markets," RAND Journal of Economics, RAND Corporation, vol. 52(2), pages 283-313, June.
    29. Dirk Bergemann & Alessandro Bonatti, 2019. "Markets for Information: An Introduction," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 85-107, August.
    30. Clavorà Braulin, Francesco, 2023. "The effects of personal information on competition: Consumer privacy and partial price discrimination," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    31. Dirk Bergemann & Alessandro Bonatti, 2011. "Targeting in advertising markets: implications for offline versus online media," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 417-443, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Flavio Pino, 2022. "The microeconomics of data – a survey," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(3), pages 635-665, September.
    2. Delbono, Flavio & Reggiani, Carlo & Sandrini, Luca, 2024. "Strategic data sales with partial segment profiling," Information Economics and Policy, Elsevier, vol. 68(C).
    3. Abrardi, Laura & Cambini, Carlo & Pino, Flavio, 2024. "Regulating data sales: The role of data selling mechanisms," Telecommunications Policy, Elsevier, vol. 48(8).
    4. Bounie, David & Dubus, Antoine & Waelbroeck, Patrick, 2025. "Collecting and selling consumer information: Selling mechanisms matter," International Journal of Industrial Organization, Elsevier, vol. 103(PB).
    5. Yiquan Gu & Leonardo Madio & Carlo Reggiani, 2019. "Exclusive Data, Price Manipulation and Market Leadership," CESifo Working Paper Series 7853, CESifo.
    6. DELBONO Flavio & REGGIANI Carlo & SANDRINI Luca, 2021. "Strategic data sales to competing firms," JRC Working Papers on Digital Economy 2021-05, Joint Research Centre.
    7. Li, Guo & Tao, Yuwei & Zheng, Hong, 2025. "Endogenous information acquisition in a competitive market with personalized pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 202(C).
    8. David Bounies & Antoine Dubus & Patrick Waelbroeck, 2020. "Market for Information and Selling Mechanisms," Working Papers ECARES 2020-07, ULB -- Universite Libre de Bruxelles.
    9. Bounie, David & Dubus, Antoine & Waelbroeck, Patrick, 2025. "Competition and the two margins of privacy," International Review of Law and Economics, Elsevier, vol. 83(C).
    10. Navarra, Federico & Pino, Flavio & Sandrini, Luca, 2024. "Mandated data-sharing in hybrid marketplaces," ZEW Discussion Papers 24-051, ZEW - Leibniz Centre for European Economic Research.
    11. Bruno Carballa Smichowski & Yassine Lefouili & Andrea Mantovani & Carlo Reggiani, 2025. "Data Sharing or Analytics Sharing ?," Working Papers hal-04956937, HAL.
    12. Yiquan Gu & Leonardo Madio & Carlo Reggiani, 2022. "Data brokers co-opetition [The impact of big data on firm performance: an empirical investigation]," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 820-839.
    13. Dubus, Antoine, 2024. "Behavior-based algorithmic pricing," Information Economics and Policy, Elsevier, vol. 66(C).
    14. Clavorà Braulin, Francesco, 2023. "The effects of personal information on competition: Consumer privacy and partial price discrimination," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    15. Ronen Gradwohl & Moshe Tennenholtz, 2022. "Pareto-Improving Data-Sharing," Papers 2205.11295, arXiv.org.
    16. Xiang He & Li Li & Di Wang & Zonghuo Li, 2025. "Advertising bidding involving consumer information sharing," Electronic Commerce Research, Springer, vol. 25(2), pages 1033-1066, April.
    17. Ronen Gradwohl & Moshe Tennenholtz, 2023. "Selling Data to a Competitor (Extended Abstract)," Papers 2307.05078, arXiv.org.
    18. Choe, Chongwoo & Matsushima, Noriaki & Tremblay, Mark J., 2022. "Behavior-based personalized pricing: When firms can share customer information," International Journal of Industrial Organization, Elsevier, vol. 82(C).
    19. Andrew Rhodes & Jidong Zhou, 2024. "Personalized Pricing and Competition," American Economic Review, American Economic Association, vol. 114(7), pages 2141-2170, July.
    20. Shuaicheng Liu, 2023. "Location choice with asymmetric data in the Hotelling model," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(4), pages 855-878, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:indorg:v:103:y:2025:i:pa:s016771872500013x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505551 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.