SUPPLYING INFORMATION TO FACILITATE PRICE-DISCRIMINATION

We examine the incentive of a seller to allow potential buyers to acquire private information about their tastes for the seller's product. Improved private information for buyers enables the seller to segment the market and charge higher prices to high-value buyers. However, improved information can also provide rents to buyers. In a variety of settings, this tradeoff is optimally resolved at one of two extremes: either buyers are supplied with the best available knowledge of their tastes, or no information is supplied by the seller.