  Product personalization opens the door to price discrimination. A rich
product line allows for higher consumer satisfaction, but the mere choice of a
product carries valuable information about the consumer that the firm can
leverage for price discrimination. Controlling the degree of product
personalization provides the firm with an additional tool to curb ratcheting
forces arising from consumers' awareness of being price discriminated. Indeed,
a firm's inability to not engage in price discrimination introduces a novel
distortion: The firm offers a subset of the products that it would offer if,
instead, the firm could commit to not price discriminate. Doing so gives
commitment power to the firm: By "pooling" consumers with different tastes to
the same variety the firm commits not to learn their tastes.
