Monday, October 21, 2019

Facebook could increase profit by using price discrimination


This paper explores how Facebook could profitably employ price discrimination. "We find that a profit maximizing platform should decrease fees or advertising for users who elastically demand the platform (the direct effect) and who create high amounts of network value for other profitable users who themselves demand the platform elastically(the network effect). ... Facebook could increase profits by decreasing the amount of advertising on some market segments and increasing it for others.|

No comments:

Post a Comment