Quality of Information and Oligopolistic Price Discrimination

Qihong Liu () and Konstantinos Serfes ()

Industrial Organization from EconWPA

Abstract: We investigate how the endogenous acquisition of information, of a certain quality level, on consumers' willingness to pay (location) affects the equilibrium prices and welfare in a spatial price discrimination model. By varying the information quality we are able to obtain the equilibrium in the game for all levels of price discrimination and in the limit the case of perfect price discrimination. This gives us insights about equilibrium behavior in markets where: 1) Information on consumer characteristics is used by the firms to facilitate price discrimination and 2) The quality of information is constantly improving due to advances of the information technology (IT).

Keywords: Price discrimination; Information quality; Information acquisition (search for similar items in EconPapers)
JEL-codes: D43 L13 O30 (search for similar items in EconPapers)
Date: 2002-03-06, Revised 2002-03-06
Note: Type of Document - pdf; prepared on PC; TeX; to print on HP/PostScript/Franciscan monk; pages: 48 ; figures: included. A previous version of this paper was titled ``Endogenous acquisition of information on consumer willingness to pay in a product differentiated duopoly.''

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Related works:
Working Paper: Quality of Information and Oligopolistic Price Discrimination (2002)
Journal Article: Quality of Information and Oligopolistic Price Discrimination (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpio:0203004

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