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Monopolistic personalized pricing with a data advantage and cross-market harm

Author

Listed:
  • Noriaki Matsushima

    (Osaka School of International Public Policy, the University of Osaka)

Abstract

This paper develops a model of two monopoly markets linked by a common consumer budget constraint. A data-rich firm can set personalized prices in one market, whereas a traditional firm in the other must charge a uniform price. Personalized pricing can expand demand in the data-rich firm's market, but because purchases come from a shared budget, it shrinks the residual demand facing the traditional firm and reduces its profit. When budgets are sufficiently tight, this adjacent-market distortion dominates same-market demand expansion, reducing total surplus. Thus, favorable same-market evidence alone is insufficient to support a benign assessment.

Suggested Citation

  • Noriaki Matsushima, 2026. "Monopolistic personalized pricing with a data advantage and cross-market harm," OSIPP Discussion Paper 26E006, Osaka School of International Public Policy, Osaka University.
    • Handle: RePEc:osp:wpaper:26e006
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    File URL: https://www.osipp.osaka-u.ac.jp/archives/DP/2026/DP2026E006.pdf
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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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