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Market Segmentation Through Information

Author

Listed:
  • Elliott, M.
  • Galeotti., A.
  • Koh., A.
  • Li, W.

Abstract

An information designer has information about consumers' preferences over products sold by oligopolists and chooses what information to reveal to firms who, then, compete on price by making personalized offers. We study the market outcomes the designer can achieve. The information designer is a metaphor for an internet platform which uses data on consumers to target advertisements that include discounts and promotions. Our analysis demonstrates the power that users' data can endow internet platforms with, and speaks directly to current regulatory debates.

Suggested Citation

  • Elliott, M. & Galeotti., A. & Koh., A. & Li, W., 2021. "Market Segmentation Through Information," Cambridge Working Papers in Economics 2105, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2105
    Note: mle30
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    References listed on IDEAS

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    More about this item

    Keywords

    Information design; market segmentation; price discrimination;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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