  This paper investigates third-degree price discrimination under endogenous
market segmentation. Segmenting a market requires access to information about
consumers, and this information comes with a cost. I explore the trade-offs
between the benefits of segmentation and the costs of information acquisition,
revealing a non-monotonic relationship between consumer surplus and the cost of
information acquisition for monopolist. I show that in some markets, allowing
the monopolist easier access to customer data can also benefit customers. I
also analyzed how social welfare reacts to changes in the cost level of
information acquisition and showed that the non-monotonicity result is also
valid in social welfare analysis.
