Behavior-based price discrimination with retention offers

Behavior-based price discrimination with retention offers

This paper is a …rst step in investigating the competitive and welfare e¤ects of behavior-based price discrimination (BBPD) in markets where …rms have information to employ retention strategies as an attempt to avoid the switching of their clientele to a competitor. We focus on retention activity in the form of a discount o¤ered to a consumer expressing an intention to switch. When retention st...

Behavior-Based Price Discrimination and Customer Recognition*

When firms are able to recognize their previous customers, they may be able to use their information about the consumers’ past purchases to offer different prices and/or products to consumers with different purchase histories. This article surveys the literature on this “behavior-based price discrimination.” *Forthcoming in the Handbook on Economics and Information Systems, Elsevier. We thank M...

Behavior - based price discrimination by a patient seller

We investigate a model in which one seller and one buyer trade in each of two periods. The buyer has demand for one unit of a non-durable object per period. The buyer’s reservation value for the good is private information and is the same in both periods. The seller commits to prices in each of two periods. Prices in the second period may depend on the buyer’s first-period behavior. Unlike the ...

Competitive Behavior-Based Price Discrimination for Software Upgrades

Regulation with non-price discrimination

This paper considers the optimal regulation of access charges, and the effect such regulation has on incentives for non-price discrimination. I show that when a vertically integrated firm is able to discriminate against rivals by means of non-price measures, optimal access charges must be set higher than in the case when no discrimination is possible since the level of the access charge affects...