On the profitability of behaviour‐based price discrimination under purchase‐dependent preferences

Stéphane Lemarié () and Cecilia Vergari ()
Additional contact information
Stéphane Lemarié: GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes
Cecilia Vergari: UniPi - University of Pisa [Italy] = Università di Pisa [Italia] = Université de Pise [Italie]

Post-Print from HAL

Abstract: We study optimal monopoly pricing of non‐durable goods over two periods when consumer preferences evolve endogenously. We introduce a propensity for a second purchase that defines the influence of the first‐period purchase on the second‐period willingness to pay for the product, reflecting either satiation or habit. With this setting, second‐period demand depends on first‐period purchase and price, raising a dynamic pricing problem. Optimal pricing is analyzed with, at the second period, either uniform pricing or price discrimination between past and new buyers. We show that the propensity for a second purchase affects the capacity of the monopoly to commit on the pricing scheme and on second‐period prices. In particular, the monopoly, if able, cannot escape from discriminating between past and new buyers at the second period. However, this pricing scheme is more profitable for the monopoly, as compared to uniform pricing, if there is strong enough satiation. Moreover, the monopoly can commit on second‐period prices only with uniform pricing and habit. These results contrast with the standard literature on dynamic pricing and behaviour‐based price discrimination.

Date: 2026-09-07
References: Add references at CitEc
Citations:

Published in Canadian Journal of Economics = Revue Canadienne d'Économique, 2026, 59 (3), pp.1101-1127. ⟨10.1111/caje.70079⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-05771586

DOI: 10.1111/caje.70079

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().