Analysis Of Pricing Strategy Of Internet Firms From The Perspective Of The Economics Of Privacy

With the rapid development of the Internet,there are countless transactions and activities on the Internet every day,and the large amount of private information generated by transactions and activities has become the focus of public attention.Consumers' personal information,website browsing history and shopping history can be considered as private information,and these private information have greatly increased value after being collected,processed and analyzed by information technology.They provide an important basis for companies to identify and classify consumers.For companies,on the one hand,because private information can reflect the characteristics,needs and shopping preferences of a consumer,therefore,the use of advanced information technology to analyze the privacy information of different consumers can help companies quickly grasp the different valuations and preferences of products by different consumers.After that,companies can push targeted ads,provide personalized services and implement price discrimination based on different characteristics of consumers;on the other hand,companies worry that their use of consumer privacy information will cause consumers to worry too much about privacy information issues.Out of protecting corporate image and maintaining customers,companies will promise consumers to protect instead of using their private information.For consumers,on the one hand,consumers are willing to share their private information with companies in order to improve their online shopping efficiency and enjoy personalized services;on the other hand,he frequent use of private information by enterprises may lead to the leakage of consumer private information,the receipt of various types of spam emails,and the price discrimination by enterprises,These also make consumers want to take anonymous countermeasures to deny companies access to private information.It is precisely because the protection or sharing of private information has two-sided results,and the difference between the accuracy of information technology owned by Internet companies and the characteristics of consumers,have led to various pricing strategies adopted by enterprises and strategic behaviors adopted by consumers under different conditions.These differences also have led to the discussion and research on the impact of different strategic behaviors of enterprises and consumers on the welfare of all parties and what level of privacy will optimize benefits for all parties.Based on the intertemporal price discrimination model,consumer addressability and privacy economics theory,this paper establishes a monopoly market model based on the characteristics of the current Internet environment.Under the monopoly structure,a mathematical model is constructed for Internet companies to use three different types of consumer information for unified pricing and discriminatory pricing(that is,companies pricing differently based on the consumer's mobile phone usage system,consumer shopping history,and comprehensive consumer information).Through solving the game and comparing the welfare between different pricing strategies,we can get the pricing strategies that can maximize the welfare of enterprises and consumers.Finally,combined with the conclusions of the model,some suggestions can be made on how the government or related institutions should regulate the privacy information on the Internet.Specifically,when consumers do not take countermeasures,if a company differentiates consumers into high-value and low-value consumers based on the difference in consumer mobile phone systems and implements price discrimination,then companies that implement price discrimination will get more profit than uniform pricing,and consumers' surplus will suffer,but in general,the implementation of price discrimination makes the overall social welfare higher.It is also the case that consumers do not take countermeasures,if the company discriminates consumers into new and old users based on their shopping history and implements price discrimination,then the profit of the enterprise when implementing price discrimination will be less than the profit of uniform pricing.And the consumers' surplus when discriminated by the enterprise price will be greater than the surplus when the enterprise uniform pricing.When both of companies and consumers take strategic actions,and after comprehensive analysis of various types of consumer information,enterprises can completely discriminate against consumers with a certain probability.At this time,enterprises will gain more profits when they implement price discrimination than unified pricing,and the total consumer surplus when consumers adopt anonymous is less than the surplus when they adopt non-anonymous.In general,when companies implement different pricing strategies based on different consumer information,the pricing strategies and the level of privacy which can make all parities' welfare optimal are different.Therefore,regulators and governments also need to adapt to local conditions when regulating the Internet environment and privacy information.