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Tracking tools, such as cookies, enable firms to build profiles of consumers on the internet and target them with individualized prices, thus extracting consumer surplus. In a second experiment, we. However, this reliance on personal data has heightened public concern over privacy breaches, data misuse, and algorithmic surveillance.
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The study highlights the necessity for a balanced approach that addresses consumer privacy concerns while maintaining the benefits of personalized marketing. Using data from a unique randomized controlled pricing field experiment we train a demand model and conduct inference about the effects of personalized pricing on firm and consumer surplus This paper studies one such complex environment with personalized pricing
Balancing personalized marketing with data privacy is no longer optional—it’s a mandate for sustainable business growth
On top of that, the general marketing practice of creating personalized content in the name of user involvement highlights. On the industry side, marketers acknowledge the importance of data protection but face difficulties in implementing effective privacy measures without compromising personalization quality This paper synthesizes emerging empirical findings from the academic literatures in marketing and economics about the intended versus unintended consequences of existing and pending privacy regulations for consumer markets (see also bleier, goldfarb & tucker 2020) Big data and data technology have facilitated the widespread adoption of personalized pricing practices
While price personalization enables firms to extract greater rent from consumers, it often reduces price transparency, which can negatively impact firm profits in situations involving consumer coordination.
