Information provision and behaviour-based price discrimination

Journal article: This article examines a model wherein firms first advertise their existence to consumers and, in the two following periods, compete with uniform pricing and then with behaviour-based price discrimination. I show that allowing firms to price discriminate can restore symmetry in equilibrium advertising decisions. I also establish that price discrimination increases (resp. decreases) profits and total welfare but hurts (resp. benefits) consumers when the advertising cost is high (resp. low).

Author(s)

Romain de Nijs

Journal
  • Information Economics and Policy
Date of publication
  • 2013
Keywords JEL
D43 L11 L13 M37
Keywords
  • Price discrimination
  • Informative advertising
  • Mixed pricing
Pages
  • 32-40
Version
  • 1
Volume
  • 25