Market Segmentation and Product Steering

A monopolistic seller possesses an inventory containing distinct products, each consumer wishes to buy a single product, and the seller can steer consumers' choices. We fully characterize the producer-consumer surplus pairs induced by market segmentation when the number of products is large. The same characterization holds if the seller cannot price discriminate. We also investigate the relationship between consumer surplus, social welfare, and consumer privacy. Along the Pareto frontier, points with greater consumer surplus can be reached by market segmentations that afford more privacy. (JEL D42, D83, L81)