Behavior-Based Price Discrimination with Strategic Customer Targeting
Résumé
We analyze the impact of strategic consumer targeting on market competition in a two-period framework of behavior-based price discrimination. Strategic firms price-discriminate high-valuation customers and charge a homogeneous price to low-valuation customers, even when they have information on them.
Strategic targeting questions the main results of the literature: firms do not compete for customer information acquisition and there is no consumer poaching. However, compared with information acquired from a third-party, strategic targeting using first-party data increases competition. As firms are developing sophisticated strategies based on first-party data, we argue that competition authorities should reconsider the benefits of targeting for consumers.
| Origine | Fichiers produits par l'(les) auteur(s) |
|---|