Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210763 
Year of Publication: 
2019
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2019-22
Publisher: 
Bank of Canada, Ottawa
Abstract: 
I study the welfare and price implications of consumer privacy. A consumer discloses information to a multi-product seller, which learns about the consumer's preferences, sets prices, and makes product recommendations. While the consumer benefits from accurate product recommendations, the seller may use the information to price discriminate. I show that the seller prefers to commit to not using consumer information for pricing to encourage information disclosure. However, this commitment hurts the consumer, who could be better off by pre-committing to withhold some information. In contrast to single-product models, total surplus may be lower if the seller can base prices on information.
Subjects: 
Economic models
JEL: 
D82
D83
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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