Experimenting with Purchase History Based Price Discrimination: a Comment

Michel Tolksdorf
Additional contact information
Michel Tolksdorf: TU Berlin

No 310, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Brokesova, Deck and Peliova [Int. J. Ind. Organ. 37 (2014) 229-237] have shown that comparative static results from two-period behavior-based pricing models hold in laboratory experiments, but they observed significant differences from point predictions. We report findings in conformity with these point predictions throughout a uniform pricing benchmark, a replication of Brokesova, Deck and Peliova’s behavior-based pricing treatment and a follow-up experiment. Reference dependence seems to shift participants’ second-period pricing behavior upwards. A post hoc analysis shows that considering myopic consumers instead of strategic consumers explains a downward shift of first-period prices and rationalizes the findings of Brokesova, Deck and Peliova. Volatile price levels affect price-based welfare measures such as sellers’ profits and customers’ total costs. We show that transport costs serve as a robust welfare measure, alleviating the impact of distorted prices. These findings are relevant for the design of experiments and when assessing the efficiency of experimental markets.

Keywords: behaviour-based price discrimination; pricing experiment (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2022-01-14
New Economics Papers: this item is included in nep-com and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rationality-and-competition.de/wp-content/uploads/2022/01/310.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rco:dpaper:310

Access Statistics for this paper

More papers in Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition
Bibliographic data for series maintained by Viviana Lalli (info@rationality-and-competition.de).