EconPapers    
Economics at your fingertips  
 

Discriminating against Captive Customers

Mark Armstrong () and John Vickers ()

American Economic Review: Insights, 2019, vol. 1, issue 3, 257-72

Abstract: We analyze a market where some consumers only consider buying from a specific seller while other consumers choose the best deal from several sellers. When sellers are able to discriminate against their captive customers, we show that discrimination harms consumers in aggregate relative to the situation with uniform pricing when sellers are approximately symmetric, while the practice tends to benefit consumers in sufficiently asymmetric markets. We also show how the asymmetry of markets may be affected by the information that firms have on consumer captivity.

JEL-codes: D11 D43 D83 L13 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/aeri.20180581
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aeri.20180581 (application/pdf)
https://www.aeaweb.org/doi/10.1257/aeri.20180581.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Discriminating Against Captive Customers (2018) Downloads
Working Paper: Discriminating Against Captive Customers (2018) Downloads
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:aea:aerins:v:1:y:2019:i:3:p:257-72

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review: Insights is currently edited by Amy Finkelstein

More articles in American Economic Review: Insights from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2020-08-26
Handle: RePEc:aea:aerins:v:1:y:2019:i:3:p:257-72