Market Segmentation and Product Steering
Year: 2025
Type: article
Abstract: A monopolistic seller possesses an inventory containing distinct products, each consumer wishes to buy a single product, and the seller can steer consumers' choices. We fully characterize the producer-consumer surplus pairs induced by market segmentation when the number of products is large. The same characterization holds if the seller cannot price discriminate. We also investigate the relationship between consumer surplus, social welfare, and consumer privacy. Along the Pareto frontier, points with greater consumer surplus can be reached by market segmentations that afford more privacy. (JEL D42, D83, L81)
DOI: 10.1257/mic.20240078
Authors: Stefan Terstiege, Adrien Vigier
Institutions: Maastricht University, University of Nottingham
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4415619358