Who can profit from personalised pricing - supplier, retailers, or consumers?

Biao Ma and Li Li

International Journal of Networking and Virtual Organisations, 2023, vol. 29, issue 2, 183-210

Abstract: The speedy development in information technology has enabled the firms to profile consumers and serve them with personalised pricing. This study constructs a game with a supplier, dominant retailer, and weak retailer to simultaneously consider price competition and advertising competition. We find that the dominant retailer will always employ unified pricing. Regarding the weak retailer, when the cost of personalised pricing is low, it will employ personalised pricing; otherwise, it employs unified pricing. The supplier hopes that the weak retailer will employ personalised pricing to obtain higher profits. Personalised pricing improves consumer surplus, but because of the characteristics of personalised pricing itself, some consumers' interests are always harmed. It should be noted that this is single-phase research that does not consider the intertemporal situation.

Keywords: personalised pricing; advertising; asymmetric competition; supplier; dominant retailer; weak retailer. (search for similar items in EconPapers)
Date: 2023
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