Persuading Customers to Buy Early: The Value of Personalized Information Provisioning

43 Pages Posted: 27 Jun 2018 Last revised: 30 Oct 2018

See all articles by Kimon Drakopoulos

Kimon Drakopoulos

University of Southern California

Shobhit Jain

University of Southern California - Data Sciences and Operations

Ramandeep S. Randhawa

University of Southern California

Date Written: October 22, 2018

Abstract

We study a pricing and information provisioning game between a better informed seller (such as a retailer) and its customers. The seller is (ex-post) better informed about product availability and can choose how to communicate this information to the customers. Using a Bayesian persuasion framework, we find that public information provisioning in which the firm sends the same information to all customers has limited value. However, personalized information provisioning, in which the firm can share different information with different customers, has significant value and has attributes very similar to personalized pricing.

Suggested Citation

Drakopoulos, Kimon and Jain, Shobhit and Randhawa, Ramandeep S., Persuading Customers to Buy Early: The Value of Personalized Information Provisioning (October 22, 2018). Available at SSRN: https://ssrn.com/abstract=3191629 or http://dx.doi.org/10.2139/ssrn.3191629

Kimon Drakopoulos (Contact Author)

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

Shobhit Jain

University of Southern California - Data Sciences and Operations ( email )

701 Exposition Blvd
Los Angeles, CA
United States

Ramandeep S. Randhawa

University of Southern California ( email )

Marshall School of Business
BRI 401, 3670 Trousdale Parkway
Los Angeles, CA 90089
United States

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