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Behavior-based price discrimination with a general demand
Esteves, Rosa Branca; Shuai, JieThis paper offers a complete picture of the impact of behavior-based price discrimination on profits, consumer surplus, and welfare in markets with a general demand function, where consumers and firms can discount the future at different discount factors. Regardless of the demand function considered, in comparison to uniform pricing, BBPD reduces firms´ second-period prices and profits. In contrast, we show tha...
Winners and losers of gatekeeper-induced consumer preference distortion in prom...
Esteves, Rosa Branca; Pasquier, Nicolas Robert SimonWe present a model of duopoly competition in a marketplace with a llotelling segment of consumer& where two business users (firms) have access to raw consumer data. The firms can chase between personalized prim (PP). using a costly personalized program device provided by the marketplace. or tunform prices at no additional cost. One firm has a higher level of experience in utilizing consumer data. insulting in a...
The welfare effects of group and personalized pricing in markets with multi-uni...
Esteves, Rosa BrancaThis paper assesses the welfare effects of firms´ability to use data for group and personalized pricing in markets with unit (q = 1) and multi-unit demand consumers (q > 1). The "disutility cost" of not consuming the ideal good is a function of units purchased and can increase at a decreasing rate β Ꞓ [0,1] as consumption increases ( β is the elasticity of the disutility cost with respect to q): Group pricing (...
Personalized prices in a delivered pricing model with a price sensitive demand
Esteves, Rosa Branca; Shuai, JieThis paper provides a first assessment of the profit and welfare effects of firms’ ability to charge personalized prices where consumer demand is sensitive to price changes. In a mill pricing model, regardless of demand elasticity, personalized priicing (PP) raises consumer surplus at the expense of profits. In contrast, in a delivered pricing model, if demand is sufficiently elastic, PP boosts profits at the e...
Quality discrimination in healthcare markets
Esteves, Rosa Branca; Ghandour, Ziad; Straume, Odd RuneRecent advances in healthcare information technologies allow healthcare providers to more accurately track patient characteristics and predict the future treatment costs of previously treated patients, which increases the scope for providers to quality discriminate across different patient types. We theoretically analyse the potential implications of such quality discrimination in a duopoly setting with profit-...
Access to data for personalized pricing: can it raise entry barriers and abuse ...
Esteves, Rosa Branca; Carballo-Cruz, FranciscoThis paper offers some insights for competition policy agencies in charge of determining whether the use of data by dominant firms can harm competition and consumers. When the welfare criterion is consumer surplus we show that in markets characterized by sufficiently low entry costs, the ability of the incumbent firm to price discriminate is not enough to exclude the rival from the market. In this case, we show...
Can data openness unlock competition when the incumbent has exclusive data acce...
Esteves, Rosa Branca; Carballo-Cruz, FranciscoThis paper investigates the role of an incumbent.s data investment decisions in shaping the competitive interaction of .rms and market structure. We provide antitrust agencies with some insights that may help them to determine whether and when personalized pricing (PP) by a dominant .rm, which is enabled by the use of exclusive data, dampens competition and harms consumers. In markets with intermediate entry co...
Can personalized pricing be a winning strategy in oligopolistic markets with he...
Esteves, Rosa BrancaThis paper aims to understand under what market conditions, can competing symmetric firms employ personalized pricing as a winning strategy. A key departure of our paper from the literature is that we introduce customer heterogeneity in demand. If firms´ data discloses only vertical information (demand heterogeneity), firms can only employ group pricing. This is always a winning strategy. When data discloses ho...
Behavior-based price discrimination with non-uniform distribution of consumer p...
Esteves, Rosa Branca; Liu, Qihong; Shuai, JieFirms commonly price discriminate across consumers based on purchase history, a practice known as behavior-based price discrimination (BBPD). Existing studies usually assume that consumer preferences follow uniform distribution, and find that BBPD benefits consumers at the cost of firms, prisoners’ dilemma. In this paper, we consider a class of consumer preferences distribution and show that new profit and welf...
Personalized princing with targeted advertising : who are the winners?
Esteves, Rosa Branca; Resende, JoanaThis paper investigates who wins and who loses when rms depart from a mass advertising/uniform pricing strategy (benchmark model) to a targeted advertising/price discrimination one. We characterize the equilibrium outcomes in both settings. Then, we address the competitive and welfare e⁄ects of personalized pricing with targeted advertising by comparing the results obtained under this business strategy to the o...