Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/21382

TitlePrice discrimination with private and imperfect information
Author(s)Esteves, Rosa Branca
KeywordsCompetitive price discrimination
Imperfect customer recognition
Imperfect information
Issue date2012
PublisherUniversidade do Minho
Abstract(s)This paper investigates the competitive and welfare effects of information accuracy improvements in markets where firms can price discriminate after observing a private and noisy signal about a consumer’s brand preference. It shows that firms charge more to customers they believe have a brand preference for them, and that this price has an inverted-U shaped relationship with the signal’s accuracy. In contrast, the price charged after a disloyal signal has been observed falls as the signal’s accuracy rises. While industry profit and overall welfare fall monotonically as price discrimination is based on increasingly more accurate information, the reverse happens to consumer surplus.
TypeWorking paper
URIhttp://hdl.handle.net/1822/21382
Publisher versionhttp://www3.eeg.uminho.pt/economia/nipe/docs/2012/NIPE_WP_12_2012.pdf
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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