Customer Recognition and Mobile Geo-Targeting

Irina Baye (), Philip Hanspach (), Tim Reiz () and Geza Sapi ()
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Irina Baye: Heinrich Heine University of Düsseldorf
Philip Hanspach: European University Institute
Tim Reiz: Heinrich Heine University of Düsseldorf
Geza Sapi: Heinrich Heine University of Düsseldorf

Review of Industrial Organization, 2024, vol. 64, issue 4, No 6, 615-644

Abstract: Abstract We consider competing mobile marketers that complement geo-targeting with behavior-based pricing and send personalized offers to customers. Firms observe consumers’ locations and can infer their (heterogeneous) responsiveness to discounts from purchase histories. The overall profit effect of behavioral targeting is driven by firms’ discount factor and consumers’ transport cost and can be neutral, positive, or negative. We are the first to show that the profitability of behavioral data may depend on firms’ time preferences. We derive conditions for when firms prefer more rather than less behavioral targeting.

Keywords: Mobile marketing; Location targeting; Behavioral targeting; Price discrimination; Customer data (search for similar items in EconPapers)
JEL-codes: D43 L13 L15 M37 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11151-024-09952-2

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