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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," Janeway Institute Working Papers 2114, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camjip:2114
    Note: mle30
    as

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    File URL: https://www.janeway.econ.cam.ac.uk/working-paper-pdfs/jiwp2114.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Pak Hung Au & Mark Whitmeyer, 2024. "Attraction Via Prices and Information," Papers 2402.11754, arXiv.org.

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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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