Strategic Data Sales With Partial Segment Profiling

45 Pages Posted: 28 Mar 2022 Last revised: 24 Feb 2023

See all articles by Flavio Delbono

Flavio Delbono

University of Bologna - School of Economics, Management, and Statistics

Carlo Reggiani

The University of Manchester

Luca Sandrini

ZEW – Leibniz Centre for European Economic Research; Budapest University of Technology and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 24, 2023

Abstract

The unprecedented access of firms to consumer level data facilitates more precisely targeted individual pricing. We consider an oligopoly market à la Salop in which only one segment of consumers is profiled. In particular, the segment includes a share of the consumers in the market around one of the firms. We study the incentives of a data broker to sell data about such a segment to three competing firms. Data are never sold exclusively. Despite the data are particularly tailored to the potential clientele of one of the firms, we show that the data broker has incentives to sell the list to its competitors. Such market outcome is not socially optimal, and a regulator considering to mandate data sharing can shift the surplus from the data broker to downstream firms.

Keywords: data markets, personalised pricing, price discrimination, oligopoly, selling mechanisms.

JEL Classification: D43; K21; L11; L13; L41; L86; M21; M31.

Suggested Citation

Delbono, Flavio and Reggiani, Carlo and Sandrini, Luca, Strategic Data Sales With Partial Segment Profiling (February 24, 2023). Available at SSRN: https://ssrn.com/abstract=4046961 or http://dx.doi.org/10.2139/ssrn.4046961

Flavio Delbono

University of Bologna - School of Economics, Management, and Statistics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Carlo Reggiani

The University of Manchester ( email )

Oxford Road
Manchester, N/A M13 9PL
United Kingdom

HOME PAGE: http://https://sites.google.com/view/carloreggianieconomics/home

Luca Sandrini (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Budapest University of Technology and Economics ( email )

Budafoki ut 8.
Budapest, 1111
Hungary

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
150
Abstract Views
532
Rank
352,283
PlumX Metrics