November 07, 2018
CORE, room c.035
Leonardo Madio, UCLouvain CORE
Data Brokers Co-opetition
Joint work with Y. Gu, University of Liverpool and Carlo Reggiani, University of Manchester
Data brokers collect customer information from several sources and sell them to other firms. We propose a simple model of the sector, in which two data brokers can sell customer level information to a downstream firm. The information enables the downstream firm to price discriminate. The optimal strategy of the data brokers depends on the nature of the information available. In particular, we show that when data are "additive" or "supra-additive", both brokers find it optimal to compete and the downstream firm acquires information from both. However, when data are "sub-additive", with the combined value being lower than the sum of the value of the two datasets, data brokers prefer to share data and sell it jointly.