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Price discrimination and targeted advertising : a welfare analysis

Abstract

We present a monopolistic model of price discrimination by means of targeted informative advertising. Targeting is defined as the ability of the monopolist to direct messages with differentiated contents to groups of buyers with different valuations for the good. We show that only if targeting is perfect will the monopolist behave in a socially desirable way.Fundação para a Ciência e a Tecnologia (FCT

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