Economics at your fingertips  

Personalized pricing versus history-based pricing: implications for privacy policy

Topi Miettinen () and Rune Stenbacka

Information Economics and Policy, 2015, vol. 33, issue C, 56-68

Abstract: We compare personalized and history-based pricing and show that personalized pricing harms consumer surplus and total welfare when evaluated over a two-period horizon. The model is characterized by two key features: (1) the discounted two-period profits are invariant to whether personalized or history-based pricing is applied because higher period-2 profits with personalized pricing are offset by lower period-1 profits. (2) Consumer mobility is invariant to whether history-based or personalized pricing is applied, but personalized pricing leads to a higher proportion of inefficient switching, and a lower proportion of efficient switching.

Keywords: Personalized pricing; History-based pricing; Customer recognition; Price discrimination; Privacy; Switching cost (search for similar items in EconPapers)
JEL-codes: D43 L13 L40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

DOI: 10.1016/j.infoecopol.2015.10.003

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 Catherine Liu ().

Page updated 2021-12-11
Handle: RePEc:eee:iepoli:v:33:y:2015:i:c:p:56-68