Price discrimination with private and imperfect information
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Publication Date: | 2012 |
Format: | Article |
Language: | eng |
Source: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Download full: | http://hdl.handle.net/1822/21382 |
Summary: | This paper investigates the competitive and welfare effects of information accuracy improvements in markets where firms can price discriminate after observing a private and noisy signal about a consumer’s brand preference. It shows that firms charge more to customers they believe have a brand preference for them, and that this price has an inverted-U shaped relationship with the signal’s accuracy. In contrast, the price charged after a disloyal signal has been observed falls as the signal’s accuracy rises. While industry profit and overall welfare fall monotonically as price discrimination is based on increasingly more accurate information, the reverse happens to consumer surplus. |
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Price discrimination with private and imperfect informationCompetitive price discriminationImperfect customer recognitionImperfect informationThis paper investigates the competitive and welfare effects of information accuracy improvements in markets where firms can price discriminate after observing a private and noisy signal about a consumer’s brand preference. It shows that firms charge more to customers they believe have a brand preference for them, and that this price has an inverted-U shaped relationship with the signal’s accuracy. In contrast, the price charged after a disloyal signal has been observed falls as the signal’s accuracy rises. While industry profit and overall welfare fall monotonically as price discrimination is based on increasingly more accurate information, the reverse happens to consumer surplus.COMPETE; QREN; FEDER; Fundação para a Ciência e a Tecnologia (FCT)Universidade do MinhoUniversidade do MinhoEsteves, Rosa Branca20122012-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/1822/21382enghttp://www3.eeg.uminho.pt/economia/nipe/docs/2012/NIPE_WP_12_2012.pdfinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-21T12:23:37ZPortal AgregadorONG |
dc.title.none.fl_str_mv |
Price discrimination with private and imperfect information |
title |
Price discrimination with private and imperfect information |
spellingShingle |
Price discrimination with private and imperfect information Esteves, Rosa Branca Competitive price discrimination Imperfect customer recognition Imperfect information |
title_short |
Price discrimination with private and imperfect information |
title_full |
Price discrimination with private and imperfect information |
title_fullStr |
Price discrimination with private and imperfect information |
title_full_unstemmed |
Price discrimination with private and imperfect information |
title_sort |
Price discrimination with private and imperfect information |
author |
Esteves, Rosa Branca |
author_facet |
Esteves, Rosa Branca |
author_role |
author |
dc.contributor.none.fl_str_mv |
Universidade do Minho |
dc.contributor.author.fl_str_mv |
Esteves, Rosa Branca |
dc.subject.por.fl_str_mv |
Competitive price discrimination Imperfect customer recognition Imperfect information |
topic |
Competitive price discrimination Imperfect customer recognition Imperfect information |
description |
This paper investigates the competitive and welfare effects of information accuracy improvements in markets where firms can price discriminate after observing a private and noisy signal about a consumer’s brand preference. It shows that firms charge more to customers they believe have a brand preference for them, and that this price has an inverted-U shaped relationship with the signal’s accuracy. In contrast, the price charged after a disloyal signal has been observed falls as the signal’s accuracy rises. While industry profit and overall welfare fall monotonically as price discrimination is based on increasingly more accurate information, the reverse happens to consumer surplus. |
publishDate |
2012 |
dc.date.none.fl_str_mv |
2012 2012-01-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/1822/21382 |
url |
http://hdl.handle.net/1822/21382 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
http://www3.eeg.uminho.pt/economia/nipe/docs/2012/NIPE_WP_12_2012.pdf |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Universidade do Minho |
publisher.none.fl_str_mv |
Universidade do Minho |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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1777303746515042304 |