We consider a data broker that holds precise information about
customer preferences. The data broker can sell this data set either
exclusively to one of two differentiated competing firms, or to both
of them. If a downstream firm obtains the data set, it can practice
personalized pricing, else it has to offer a uniform price to customers.
The first-best allocation can be achieved when data are sold non exclusively,
but this never arises in equilibrium. The data broker instead
sells the data set exclusively either to the high quality firm or to the
low quality firm rival, according to their quality-adjusted cost differential.
This leads to inefficient allocations.