Monopoly Price Discrimination and Privacy: The Hidden Cost of Hiding
17 Pages Posted: 6 Dec 2015
Date Written: October 15, 2015
A monopolist can use a 'tracking' technology that allows it to identify a consumer's willingness to pay with some probability. Consumers can counteract tracking by acquiring a 'hiding' technology. We show in this note that consumers are collectively better off when this hiding technology is not available, even when consumers can acquire it free of charge.
Keywords: price discrimination, privacy, monopoly
JEL Classification: D11, D18, L12, L86
Suggested Citation: Suggested Citation