Centre for Development Economics
and
Department of Economics, Delhi School of Economics
ANNOUNCE A SEMINAR
Consumer Privacy
and
the Value of Purchase History
with Rational Consumers
by
Shreemoy Mishra
Indraprastha Institute of Information Technology, Delhi
Thursday, 31st October 2013 at 3:00 PM
Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics
All are cordially invited
Abstract
I study the market for consumer information. Consumers make sequential purchase decisions from two firms. Consumer valuations for the two goods are positively correlated so the second firm can use purchase history for targeted pricing. In the literature, rational consumers strategically delay purchase which eliminates the value of disclosed information. In contrast, I present simple conditions under which purchase history is valuable and can be sold. The key conditions are: (i) consumer reservation values are persistent but uncertain (e.g. Markovian), (ii) firms lack the ability to commit to privacy, and (iii) the second firm is only moderately optimistic about the demand for its product.
Keywords: Consumer Privacy, Dynamic Pricing, Behavioral Targeting