Behavior-Based Personalized Pricing: When Firms Can Share Customer Information
ISER DP No. 1083, 2020
20 Pages Posted: 24 Apr 2020
Date Written: March 30, 2020
We study a model of behavior-based price discrimination where firms can agree to share customer information that can be used for personalized pricing. We show that firms are better off sharing customer information as it softens up-front competition when they gather information, consumers are worse off as a result, but total surplus can increase thanks to the improved quality of matching between firms and consumers.
Keywords: Information Sharing, Behavior-Based Price Discrimination, Personalized Pricing
JEL Classification: D43, L13
Suggested Citation: Suggested Citation