Data Tracking Under Competition

• 成果类型: Article
• 署名作者: Bimpikis, Kostas; Morgenstern, Ilan; Saban, Daniela
• 署名单位: Stanford University
• 刊物名称: OPERATIONS RESEARCH
• ISSN/ISSBN: 0030-364X
• DOI: 10.1287/opre.2023.2489
• 发表日期: 2024
• 关键词: price-discrimination; Consumer privacy; INFORMATION; MARKETS

摘要

We explore the welfare implications of data-tracking technologies that enable firms to collect consumer data and use it for price discrimination. The model we develop centers around two features: competition between firms and consumers' level of sophistication. Our baseline environment features a firm that can collect information about the consumers it transacts with in a duopoly market, which it can then use in a second, monopoly market. We characterize and compare the equilibrium outcomes in three settings: (i) an economy with myopic consumers, who, when making purchase decisions, do not internalize the fact that firms track their behavior and use this information in future transactions; (ii) an economy with forward-looking consumers, who take into account the implications of data tracking when determining their actions; and (iii) an economy where no data-tracking technologies are used due to technological or regulatory constraints. We find that the absence of data tracking may lead to a decrease in consumer surplus, even when consumers are myopic. Importantly, this result relies critically on competition: Consumer surplus may be higher when data-tracking technologies are used only when multiple firms offer substitutable products.