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Market for Information and Selling Mechanisms

Abstract : We investigate the strategies of a data intermediary selling customized consumer information to firms for price discrimination purpose. We analyze how the mechanism through which the data intermediary sells information influences how much consumer data he will collect and sell to firms, and how it impacts consumer surplus. We consider three selling mechanisms tailored to sell customized consumer information: take it or leave it offers, sequential bargaining, and simultaneous offers. We show that the more data the intermediary collects, the lower consumer surplus. Consumer data collection is minimized, and consumer surplus maximized under the take it or leave it mechanism, which is the least profitable mechanism for the intermediary. We argue that selling mechanisms can be used as a regulatory tool by data protection agencies and competition authorities to limit consumer information collection and increase consumer surplus.
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https://hal.archives-ouvertes.fr/hal-02288708
Contributor : Antoine Dubus <>
Submitted on : Friday, April 3, 2020 - 2:57:32 PM
Last modification on : Thursday, April 9, 2020 - 1:10:12 AM

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  • HAL Id : hal-02288708, version 2

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David Bounie, Antoine Dubus, Patrick Waelbroeck. Market for Information and Selling Mechanisms. 2020. ⟨hal-02288708v2⟩

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