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  4. August 2015
  5. Selling Cookies

American Economic Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

Selling Cookies

  • Dirk Bergemann
  • Alessandro Bonatti
American Economic Journal: Microeconomics
vol. 7, no. 3, August 2015
(pp. 259–94)
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Abstract

We propose a model of data provision and data pricing. A single data provider controls a large database that contains information about the match value between individual consumers and individual firms (advertisers). Advertisers seek to tailor their spending to the individual match value. The data provider prices queries about individual consumers' characteristics (cookies). We determine the equilibrium data acquisition and pricing policies. Advertisers choose positive and/or negative targeting policies. The optimal query price influences the composition of the targeted set. The price of data decreases with the reach of the database and increases with the fragmentation of data sales. (JEL C78, D83, L11, L82, M37)

Citation

Bergemann, Dirk, and Alessandro Bonatti. 2015. "Selling Cookies." American Economic Journal: Microeconomics 7 (3): 259–94. DOI: 10.1257/mic.20140155

Additional Materials

JEL Classification

  • C78 Bargaining Theory; Matching Theory
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • L11 Production, Pricing, and Market Structure; Size Distribution of Firms
  • L82 Entertainment; Media
  • M37 Advertising