Consumer Privacy and Serial Monopoly

33 Pages Posted: 24 Apr 2019

See all articles by Venkataraman Bhaskar

Venkataraman Bhaskar

University of Texas at Austin

Nikita Roketskiy

University College London - Department of Economics

Date Written: April 2019

Abstract

We examine the implications of consumer privacy when preferences today depend upon past consumption choices, and consumers shop from different sellers in each period. Although consumers are ex ante identical, their initial consumption choices cannot be deterministic. Thus ex post heterogeneity in preferences arises endogenously. Consumer privacy improves social welfare, consumer surplus and the profits of the second-period seller, while reducing the profits of the first period seller, relative to the situation where consumption choices are observed by the later seller.

Keywords: consumer privacy, dynamic demand, endogenous screening, Nonlinear Pricing

JEL Classification: D11, D43, L13

Suggested Citation

Bhaskar, Venkataraman and Roketskiy, Nikita, Consumer Privacy and Serial Monopoly (April 2019). CEPR Discussion Paper No. DP13686, Available at SSRN: https://ssrn.com/abstract=3376617

Venkataraman Bhaskar (Contact Author)

University of Texas at Austin ( email )

2317 Speedway
Austin, TX 78712
United States

Nikita Roketskiy

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

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