Download This PaperBehavior-Based Price Discrimination and Product Choice
ISER DP No. 1079, March 2020
99 Pages Posted: 16 Mar 2020
Date Written: March 9, 2020
Abstract
We study a two-period model of behavior-based price discrimination in Fudenberg and Tirole (2000) but allow firms to make product choice in the first period. We show that the only possible equilibrium involves maximal differentiation. This is in contrast to Choe et al. (2018) where equilibrium features less than maximal differentiation when competition is in personalized pricing. Thus, our result highlights an important interplay between the type of price competition and product choice.
Keywords: behavior-based price discrimination, spatial competition
JEL Classification: D43, L13
Suggested Citation: Suggested Citation
Chongwoo Choe
Monash University - Department of Economics ( email )
Department of Economics
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