Profitability of behavior based price discrimination

Sumit Shrivastav ()
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Sumit Shrivastav: Indira Gandhi Institute of Development Research

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: In this paper, we analyze the profitability of price discrimination based on recognition of consumers' brand preferences, in a duopoly model with switching costs. We show that, in contrast to existing studies, price discrimination results into higher profits than uniform pricing if consumers are heterogeneous in terms of brand preferences and the extent of such heterogeneity is sufficiently high.

Keywords: BBPD; Consumer recognition; Price discrimination (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2021-07
New Economics Papers: this item is included in nep-com, nep-cwa, nep-ind, nep-isf and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2021-019

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