Multidimensional Price Discrimination and Partial information sharing

Abstract

Recent advances in information technologies allow firms to collect vast amounts of detailed personal information on customers and to engage in potentially profitable trade of their information assets. We are interested in the incentives of competing firms to share information if firms can separately exchange data regarding the consumers' brand preferences and transportation costs. We show that incentives to share information on heterogenous consumers critically depend on the portofolio of information both firms hold.