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The Production of Information to Price Discriminate

Author

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  • Willy Lefez

    (Humboldt Universität)

Abstract

We study price discrimination by a monopolistic seller that endogenously produces a market segmentation at a cost, and question the efficiency of the production of market segmentations led by private incentives. We show that the efficient market segmentation gives all the gains in total surplus to the buyer, and the seller profit stays at the uniform profit level. Our result suggests that the private production of information by sellers to price discriminate is significantly inefficient.

Suggested Citation

  • Willy Lefez, 2025. "The Production of Information to Price Discriminate," Rationality and Competition Discussion Paper Series 535, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:535
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    More about this item

    Keywords

    Price Discrimination; Cost of Information; Production of Information.; cost of information; production of information;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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