Discriminating Against Captive Customers

Mark Armstrong and John Vickers

MPRA Paper from University Library of Munich, Germany

Abstract: We analyze a market where some consumers only consider buying from a specific seller while other consumers choose the best deal from several sellers. When sellers are able to discriminate against their captive customers, we show that discrimination harms consumers in aggregate relative to the situation with uniform pricing when sellers are approximately symmetric, while the practice tends to benefit consumers in sufficiently asymmetric markets.

Keywords: Price discrimination; captive customers; consideration sets (search for similar items in EconPapers)
JEL-codes: D43 D8 L13 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-com, nep-mic, nep-mkt and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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https://mpra.ub.uni-muenchen.de/89284/1/MPRA_paper_89284.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/92189/1/MPRA_paper_92189.pdf revised version (application/pdf)

Related works:
Journal Article: Discriminating against Captive Customers (2019)
Working Paper: Discriminating Against Captive Customers (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89284

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