Third Degree Price Discrimination Under Costly Information Acquisition
Fuente:
arXiv
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| Autore principale: | |
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| Natura: | Preprint |
| Pubblicazione: |
2024
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| _version_ | 1866916281589956608 |
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| author | Tekdir, Irfan |
| author_facet | Tekdir, Irfan |
| contents | This paper investigates third-degree price discrimination under endogenous market segmentation. Segmenting a market requires access to information about consumers, and this information comes with a cost. I explore the trade-offs between the benefits of segmentation and the costs of information acquisition, revealing a non-monotonic relationship between consumer surplus and the cost of information acquisition for monopolist. I show that in some markets, allowing the monopolist easier access to customer data can also benefit customers. I also analyzed how social welfare reacts to changes in the cost level of information acquisition and showed that the non-monotonicity result is also valid in social welfare analysis. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2406_06026 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Third Degree Price Discrimination Under Costly Information Acquisition Tekdir, Irfan Theoretical Economics This paper investigates third-degree price discrimination under endogenous market segmentation. Segmenting a market requires access to information about consumers, and this information comes with a cost. I explore the trade-offs between the benefits of segmentation and the costs of information acquisition, revealing a non-monotonic relationship between consumer surplus and the cost of information acquisition for monopolist. I show that in some markets, allowing the monopolist easier access to customer data can also benefit customers. I also analyzed how social welfare reacts to changes in the cost level of information acquisition and showed that the non-monotonicity result is also valid in social welfare analysis. |
| title | Third Degree Price Discrimination Under Costly Information Acquisition |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2406.06026 |