American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Market Segmentation and Product Steering
American Economic Journal: Microeconomics
(pp. 126–46)
Abstract
A monopolistic seller possesses an inventory containing distinct products, each consumer wishes to buy a single product, and the seller can steer consumers' choices. We fully characterize the producer-consumer surplus pairs induced by market segmentation when the number of products is large. The same characterization holds if the seller cannot price discriminate. We also investigate the relationship between consumer surplus, social welfare, and consumer privacy. Along the Pareto frontier, points with greater consumer surplus can be reached by market segmentations that afford more privacy.Citation
Terstiege, Stefan, and Adrien Vigier. 2025. "Market Segmentation and Product Steering." American Economic Journal: Microeconomics 17 (4): 126–46. DOI: 10.1257/mic.20240078Additional Materials
JEL Classification
- D42 Market Structure, Pricing, and Design: Monopoly
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- L81 Retail and Wholesale Trade; e-Commerce