Self-Control in the Retailing Industry: Inducing Rejection of Loyalty Schemes

Matteo Foschi ()

CRETA Online Discussion Paper Series from Centre for Research in Economic Theory and its Applications CRETA

Abstract: When consumers register with loyalty schemes, or open a `customer account', offered by large retailers, they allow retailers to study their purchasing behaviour over time. Via personalised offers and discounts, retailers can then use this information to price discriminate. I study the effect on consumer welfare of this discrimination, assuming several different levels of informativeness within the schemes. When schemes are uninformative about consumer preferences they are certain to hurt consumer surplus. When they are fully or partially informative, an increase in aggregate consumer surplus can take place under some conditions. Pareto Improvements are never possible. The model studies groceries and online industries where temptation and self-control are an issue.

Keywords: Individual Pricing; Consumer Tracking; Price Discrimination; Impulse Purchasing, Self-Control; Loyalty Schemes; Hard Evidence. JEL Classification numbers: D21; D42; D43; D82; D86; L11; L81 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://warwick.ac.uk/fac/soc/economics/research/c ... 7_-_creta_foschi.pdf

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: https://EconPapers.repec.org/RePEc:wrk:wcreta:37

Access Statistics for this paper

More papers in CRETA Online Discussion Paper Series from Centre for Research in Economic Theory and its Applications CRETA Contact information at EDIRC.
Bibliographic data for series maintained by Margaret Nash ().