Profitability of behavior-based price discrimination

Sumit Shrivastav ()

Marketing Letters, 2023, vol. 34, issue 4, No 1, 535-547

Abstract: Abstract In this paper, we analyze the profitability of behavior-based price discrimination in a duopoly model with switching costs. We find that when firms price discriminate based on consumers’ preferences, and remain unaware of their switching costs, price discrimination boosts the equilibrium profits compared to uniform pricing, when the heterogeneity in the consumers’ preferences is not too large compared to that in the switching costs. This result qualitatively holds even in a two-period model with informed and forward-looking consumers.

Keywords: Price discrimination; Consumer recognition; Switching cost; Profit effects (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11002-022-09658-z Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Profitability of behavior based price discrimination (2021)
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:kap:mktlet:v:34:y:2023:i:4:d:10.1007_s11002-022-09658-z

Ordering information: This journal article can be ordered from
http://www.springer. ... etailsPage=societies

DOI: 10.1007/s11002-022-09658-z

Access Statistics for this article

Marketing Letters is currently edited by Joel Steckel and Peter Golder

More articles in Marketing Letters from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().