Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/28882

TitleBehaviour-based price discrimination under advertising and imperfectly informed consumers
Author(s)Esteves, Rosa Branca
Cerqueira, Sofia
Issue date2014
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Abstract(s)This paper is a first look at the dynamic effects of BBPD in a horizontally differentiation product market, where firms need to invest in advertising to generate awareness. When a firm is able to recognize customers with different purchasing histories, it may send them targeted advertisements with different prices. In comparison to no discrimination, it is shown that firms reduce their advertising efforts, charge higher first period prices and lower second period prices. In comparison to no discrimination, in contrast to the profit and consumer welfare results obtained under full informed consumers, it is shown that BBPD boosts industry profits and harms consumers.
TypeWorking paper
URIhttp://hdl.handle.net/1822/28882
Publisher versionhttp://www.nipe.eeg.uminho.pt/Uploads/NIPE_WP_08_2014.pdf
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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