| Abstract: |
A data seller sells consumers’ social network data, in particular, their influence (in-degree) to a monopoly firm. The firm then sells a network-good to consumers and charges personalized prices based on the purchased data. We characterize the data demand when the firm can choose the acquisition strategy: it targets the most and/or least influential consumers, depending on their relative scarcity. The data seller’s optimal data pricing induces partial targeting in equilibrium, causing an efficiency loss. When the firm is restricted to random sampling, or the data provider is allowed to use nonlinear pricing, the equilibrium features full acquisition of the consumer list. The influence data thus exhibit increasing (decreasing) marginal returns when targeting is (not) prohibited.
JEL Classification Numbers: D42, D62, D83, D85, L11, M31.
Keywords: Network externality, price discrimination, data market, influencer marketing.
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Biography:
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Renkun Yang is an assistant professor in Economics at Jinan University. He obtained his Bachelor’s Degree from Peking University, Master’s Degree from University of Wisconsin Madison and PhD Degree in Economics from The Ohio State University. His field of research is microeconomic theory, in particular mechanism design, information design and industrial organization.
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