The objective here is to explain what factors bidders need to consider when participating in an auction. I've learned that when customers have unknown values, you face a familiar trade-off: Price high and sell only to high-value customers, or price low and sell to all customers. Like Michael Porter's Five Forces Model. This is his other famous model, that of generic business strategies (i.e. Low Cost Leadership, Differentiation, and Focus/Niche).

Please advise how one can identify high-value and low-value customers, and how one can price discriminate and avoid the trade-off. I believe to avoid being discriminated against, high-value customers will try to mimic the behavior and appearance of low-value customers.

I had to read chapters 16, 17, and 18 in my Managerial Economics textbook by Froeb.

1. How would one consider social media and what part of the world population has access to it and who uses it the most?
2. How might an advertiser use this information to use price discrimination to maximize profits?