Distributional Implications of the Internet: Can Price Discrimination Improve Farmers’ Welfare?
2017
Just, David R. | Just, Richard E.
A price discrimination model is proposed to explain extraneous information provided by internetsales sites for agricultural inputs. Whether an informative site is offered depends on pricediscrimination potential, which depends on how much farmers reveal heterogeneity by internetbehavior. Price discrimination is greater if information benefits are negatively correlated withfarm-size, explaining why extraneous (not product-related) information is offered on internetsales sights. Price discrimination adversely affects some farmers but may be beneficial onaverage because it generates free information. Outcomes depend on whether internet users areaware of price differentials generated by the reverse flow of clickstream information.
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