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2000•RePEc: Research Papers in EconomicsOpen access

Price Discrimination and Targeted Advertising: A Welfare Analysis

Rosa Branca Esteves, Paulo Guimarães

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Abstract

We present a monopolistic model of price discrimination by means of targeted informative advertising. Targeting is defined as the ability of the monopolistic to direct messages with differentiated contents to groups of buyers with different valuations for the good. We show that only if targeting is perfect will the monopolistic behave in a socially desirable way.

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We present a monopolistic model of price discrimination by means of targeted informative advertising. Targeting is defined as the ability of the monopolistic to direct messages with differentiated contents to groups of buyers with different valuations for the good. We show that only if targeting is perfect will the monopolistic behave in a socially desirable way.

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Available abstract

We present a monopolistic model of price discrimination by means of targeted informative advertising. Targeting is defined as the ability of the monopolistic to direct messages with differentiated contents to groups of buyers with different valuations for the good. We show that only if targeting is perfect will the monopolistic behave in a socially desirable way.

Key concepts: Monopolistic competition, Price discrimination, Welfare, Economics, Microeconomics, Targeted advertising, Informative advertising, Advertising

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