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Distributional Implications of the Internet: Can Price Discrimination Improve Farmers’ Welfare?

Author

Listed:
  • Just, David R.
  • Just, Richard E.

Abstract

A price discrimination model is proposed to explain extraneous information provided by internet sales sites for agricultural inputs. Whether an informative site is offered depends on price discrimination potential, which depends on how much farmers reveal heterogeneity by internet behavior. Price discrimination is greater if information benefits are negatively correlated with farm-size, explaining why extraneous (not product-related) information is offered on internet sales sights. Price discrimination adversely affects some farmers but may be beneficial on average because it generates free information. Outcomes depend on whether internet users are aware of price differentials generated by the reverse flow of clickstream information.

Suggested Citation

  • Just, David R. & Just, Richard E., 2005. "Distributional Implications of the Internet: Can Price Discrimination Improve Farmers’ Welfare?," Working Papers 127074, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:127074
    DOI: 10.22004/ag.econ.127074
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    References listed on IDEAS

    as
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    2. Wolf, Steven & Just, David & Zilberman, David, 2001. "Between data and decisions: the organization of agricultural economic information systems," Research Policy, Elsevier, vol. 30(1), pages 121-141, January.
    3. Arup Daripa & Sandeep Kapur, 2001. "Pricing on the Internet," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 17(2), pages 202-216, Summer.
    4. Oecd, 1998. "Electronic Commerce: Prices and Consumer Issues for Three Products: Books, Compact Discs and Software," OECD Digital Economy Papers 32, OECD Publishing.
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