Citation

Discussion Paper Details

Please find the details for DP12936 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Price Customization and Targeting in Matching Markets

Author(s): Renato Gomes and Alessandro Pavan

Publication Date: May 2018

Keyword(s): asymmetric information, incentives, Many-to-many matching, platforms and price discrimination

Programme Area(s): Industrial Organization

Abstract: We investigate the effects on targeting and welfare of uniform pricing (be it explicitly mandated, induced by privacy regulations, or the result of the transition from a centralized to a decentralized market structure). We build a model of many-to-many matching in which preferences are both vertically and horizontally differentiated. In the absence of uniform-price obligations, platforms maximize profits through price customization, using information on local elasticities. We show how uniform pricing may either increase or decrease targeting, and identify conditions under which it is beneficial to consumer surplus. The analysis has implications for online retailing, ad exchanges, and media markets

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12936

Bibliographic Reference

Gomes, R and Pavan, A. 2018. 'Price Customization and Targeting in Matching Markets'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12936