Behavior-based price discrimination and product choice

Chongwoo Choe, Noriaki Matsushima

Research output: Contribution to journalArticleResearchpeer-review


We study a two-period model of behavior-based price discrimination, as in Fudenberg and Tirole (RAND J Econ 31(4):634–657, 2000), but we allow firms to make their product choices in the first period. We show that the only possible equilibrium involves maximal differentiation. This is in contrast to Choe et al. (Manag Sci 64(12):5669–5687, 2018), where equilibrium features less-than-maximal differentiation when competition is in personalized pricing. Thus, our result highlights an important interplay between the type of price competition and product choice.

Original languageEnglish
Pages (from-to)263-273
Number of pages11
JournalReview of Industrial Organization
Publication statusPublished - 2021


  • Behavior-based price discrimination
  • Product choice
  • Spatial competition

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