"A literature review of “The Limits of Price Discrimination” by Dirk Bergemann, Benjamin Brooks, and
Stephen Morris"
Abstract and Citation
Abstract
The more information a monopolist seller has about consumer preferences, the more power it has to price selectively and maximize profits. This paper analyzes the welfare consequences of price discrimination via market segmentation. The authors use formal mathematical arguments to show that a market can be segmented to produce all feasible surplus combinations. They conclude that consumer welfare can be prioritized through the proper structuring of information transmission and data collection.
