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Information provision and behaviour-based price discrimination

Romain de Nijs

Information Economics and Policy, 2013, vol. 25, issue 1, 32-40

Abstract: This article examines a model wherein firms first advertise their existence to consumers and, in the two following periods, compete with uniform pricing and then with behaviour-based price discrimination. I show that allowing firms to price discriminate can restore symmetry in equilibrium advertising decisions. I also establish that price discrimination increases (resp. decreases) profits and total welfare but hurts (resp. benefits) consumers when the advertising cost is high (resp. low).

Keywords: Price discrimination; Informative advertising; Mixed pricing (search for similar items in EconPapers)
JEL-codes: L11 L13 D43 M37 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.infoecopol.2013.01.003

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