Behavior-based pricing with experience goods

We consider a two-period model in which duopolists sell experience goods and practice behavior-based price discrimination (BBPD). We give general conditions for when firms should offer a lower price to existing customers (‘pay-to-stay’) or to new customers (‘pay-to-switch’). We also demonstrate that unlike previous results, BBPD may intensify competition in the first period but weaken it in the second.

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Year of publication:	2013
Authors:	De Nijs, Romain ; Rhodes, Andrew
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 118.2013, 1, p. 155-158
Publisher:	Elsevier
Subject:	Dynamic pricing \| Price discrimination \| Experience goods \| Skewness

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Type of publication:	Article
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; M4 - Accounting and Auditing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010603111