Should a firm engage in behaviour-based price discrimination when facing a price discriminating rival? A game-theory analysis
Stefano Colombo ()
Information Economics and Policy, 2015, vol. 30, issue C, 6-18
This article analyses the pricing policy equilibria emerging in a duopoly when one firm may choose whether to engage in behaviour-based price discrimination or uniform pricing while the rival price discriminates. The question we address is: should a firm price discriminate when facing a price discriminating rival? Our main conclusion is that, if the consumers are sufficiently myopic, it is better to choose uniform pricing instead of price discrimination. This is in contrast with the consensus reached in classic price discrimination theory, and it shows that it may be better for a firm to unilaterally renounce to price flexibility when facing a flexible firm.
Keywords: Behaviour-based price discrimination; Poaching; Switching costs (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:30:y:2015:i:c:p:6-18
Access Statistics for this article
Information Economics and Policy is currently edited by D. Waterman
More articles in Information Economics and Policy from Elsevier
Bibliographic data for series maintained by Haili He ().