Privacy, Prices, and Market Structure in Competitive Search Markets

Economics and Decision Sciences Department
Guest Speaker : Zvika Neeman (Tel Aviv University)
Room : T020
 

Abstract:

“Protection of consumers’ privacy is motivated by the fear that, without it, consumers may be exploited via personalized pricing. However, personalized pricing is rare in practice. We explain how privacy nevertheless affects prices in competitive search markets through its effect on market structure. If privacy is not protected, then in addition to consumer search, firms may engage in targeted advertising. We show that privacy protection reduces consumer surplus if firms’ price discriminate between the search and advertising markets. Absent such price discrimination, privacy protection can either increase or reduce consumer surplus. We relate our results to the “privacy paradox”.”

Joint work with Daniel Bird

Zoom link : https://hec-fr.zoom.us/j/96282462905