TY - JOUR
T1 - Behavior-based personalized pricing
T2 - when firms can share customer information
AU - Choe, Chongwoo
AU - Matsushima, Noriaki
AU - Tremblay, Mark J.
N1 - Funding Information:
We are thankful to the Editor, two anonymous referees, Keizo Mizuno, Yusuke Zennyo, and the participants at ARSC2020 (Kanazawa University), CORE (Université catholique de Louvain), and Japan Association for Applied Economics 2020 Spring Meeting, for helpful comments. We gratefully acknowledge financial support from the Australian Research Council (grant number DP210102015), the JSPS KAKENHI (grant numbers JP15H05728, JP17H00984, JP18H00847, JP18K01593, JP19H01483, JP20H05631, JP21H00702, and JP21K01452), the International Joint Research Promotion Program at Osaka University, and the program of the Joint Usage/Research Center for “Behavioral Economics” at the ISER, Osaka University. Although Matsushima serves as a member of the Competition Policy Research Center (CPRC) at the Japan Fair Trade Commission (JFTC), the views expressed in this paper are solely ours and should not be attributed to the JFTC. The usual disclaimer applies.
Funding Information:
We are thankful to the Editor, two anonymous referees, Keizo Mizuno, Yusuke Zennyo, and the participants at ARSC2020 (Kanazawa University), CORE (Université catholique de Louvain), and Japan Association for Applied Economics 2020 Spring Meeting, for helpful comments. We gratefully acknowledge financial support from the Australian Research Council (grant number DP210102015), the JSPS KAKENHI (grant numbers JP15H05728, JP17H00984, JP18H00847, JP18K01593, JP19H01483, JP20H05631, JP21H00702, and JP21K01452), the International Joint Research Promotion Program at Osaka University, and the program of the Joint Usage/Research Center for “Behavioral Economics” at the ISER, Osaka University. Although Matsushima serves as a member of the Competition Policy Research Center (CPRC) at the Japan Fair Trade Commission (JFTC), the views expressed in this paper are solely ours and should not be attributed to the JFTC. The usual disclaimer applies.
Publisher Copyright:
© 2022
PY - 2022/5
Y1 - 2022/5
N2 - We study a two-period model of behavior-based price discrimination where firms can agree to share customer information before the first-period competition begins, and the information can be used for personalized pricing in the second-period competition. We show that information sharing is individually rational for firms as it softens upfront competition when information is gathered, consumers are worse off as a result, but total surplus can increase thanks to the improved quality of matching between firms and consumers. These findings are robust to firm asymmetries and varying discount factors for consumers and firms.
AB - We study a two-period model of behavior-based price discrimination where firms can agree to share customer information before the first-period competition begins, and the information can be used for personalized pricing in the second-period competition. We show that information sharing is individually rational for firms as it softens upfront competition when information is gathered, consumers are worse off as a result, but total surplus can increase thanks to the improved quality of matching between firms and consumers. These findings are robust to firm asymmetries and varying discount factors for consumers and firms.
KW - Behavior-based price discrimination
KW - Information sharing
KW - Personalized pricing
UR - http://www.scopus.com/inward/record.url?scp=85129745414&partnerID=8YFLogxK
U2 - 10.1016/j.ijindorg.2022.102846
DO - 10.1016/j.ijindorg.2022.102846
M3 - Article
AN - SCOPUS:85129745414
SN - 0167-7187
VL - 82
JO - International Journal of Industrial Organization
JF - International Journal of Industrial Organization
M1 - 102846
ER -