PRICE INCREASES FROM ONLINE PRIVACY

Title: PRICE INCREASES FROM ONLINE PRIVACY

Research Question: How does the collection and use of consumer information online affect market efficiency and prices?

Methodology: The researchers used a theoretical model to estimate the value to consumers of more efficient marketing through better targeting of advertisements. This model took into account the potential benefits of reduced consumer search costs, improved product selection decisions, and lower marketing costs of goods sold.

Results: The simulations showed that the magnitude of the price decrease depended on certain key parameters, such as the proportion of consumers who value privacy, the effectiveness of target marketing, and the elasticity of demand.

Implications: The study suggests that better target marketing through the use of consumer information online can lead to lower prices for consumers. However, it also highlights the importance of balancing the benefits of market efficiency with consumer privacy concerns.

Link to Article: https://arxiv.org/abs/0109053v1 Authors: arXiv ID: 0109053v1