Abstract:
We study market segmentation in settings where a monopolistic seller possesses an inventory containing several variants of a given good, and needs to decide which variant to offer. We fully characterize the producer-consumer surplus pairs induced by market segmentation as product variety becomes large, and show that whether or not the seller can price discriminate is irrelevant.
Along the Pareto frontier, higher consumer surplus entails lower social welfare, but is compatible with greater privacy. We then study market segmentation arising from the sale of consumer data by intermediaries. Competition among data intermediaries results in lower match quality between consumers and products and lower social welfare.
The seminar will be held in room 1249 (12th floor) at Eilert Sundts Hus. The address is Moltke Moes vei 31.