Monopoly Price Discrimination and Privacy: The Hidden Cost of Hiding

17 Pages Posted: 6 Dec 2015

See all articles by Paul Belleflamme

Paul Belleflamme

CORE and Louvain School of Management, UCL (Université Catholique de Louvain); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 15, 2015

Abstract

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

Belleflamme, Paul, Monopoly Price Discrimination and Privacy: The Hidden Cost of Hiding (October 15, 2015). Available at SSRN: https://ssrn.com/abstract=2699085 or http://dx.doi.org/10.2139/ssrn.2699085

Paul Belleflamme (Contact Author)

CORE and Louvain School of Management, UCL (Université Catholique de Louvain) ( email )

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