(Reverse) Price Discrimination with Information Design

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2024
Volume: 16
Issue: 2
Pages: 267-95

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A seller markets a good to a customer whose willingness to pay depends on his private type and the good's quality. The seller designs a screening mechanism that specifies both transfers and information revealed about quality. We show that the optimal mechanism can be implemented by a menu of price-experiment pairs, featuring both price discrimination and information discrimination: buyers with higher private types face lower prices and receive less discerning positive signals. Moreover, we demonstrate the complementarity between these two forms of discrimination. Information design facilitates surplus creation on the extensive margin, but causes surplus destruction on the intensive margin.

Technical Details

RePEc Handle
repec:aea:aejmic:v:16:y:2024:i:2:p:267-95
Journal Field
General
Author Count
2
Added to Database
2026-01-29