Personalizing Prices to Redistribute Wealth in Antitrust and Public Utility Rate Regulation

Research output: Contribution to journalArticle

Abstract

The information age is increasingly enabling firms with even small amounts of market power to personalize the prices they charge to each consumer in the market. Left to their own devices, firms will use this new power to increase profits, by charging prices personalized to the maximum that each consumer is willing to pay. But the new power to personalize prices can also be used to benefit consumers, and virtually all of the legal rules needed to do so are already in place. Both the antitrust laws and state and federal rate regulatory regimes require enforcers to act to maximize consumer welfare, and both give enforcers the power to demand that firms personalize low, rather than the highest possible, prices. Before the information age made personalized pricing possible, enforcers hesitated to act aggressively to push prices down, because of efficiency concerns associated with manipulating market prices. But personalized prices are always efficient, whether set high by firms, or low by regulators, creating an unprecedented opportunity for government to do distributive justice.
Original languageAmerican English
JournalWisconsin Law Review
StateAccepted/In press - 2022

Keywords

  • How Antitrust Really Works: A Theory of Input Control and Discriminatory Supply
  • Ramsi Woodcock
  • SSRN

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