Abstract
We study personalized pricing in a general oligopoly model. The impact of personalized pricing relative to uniform pricing hinges on the degree of market coverage. If market conditions are such that coverage is high (e.g., the production cost is low, or the number of firms is high), personalized pricing harms firms and benefits consumers, whereas the opposite is true if coverage is low. When only some firms have data to personalize prices, consumers can be worse off compared to when either all or no firms personalize prices.
Keywords
personalized pricing; competition; price discrimination; consumer data;
JEL codes
- D43: Oligopoly and Other Forms of Market Imperfection
- D82: Asymmetric and Private Information • Mechanism Design
- L13: Oligopoly and Other Imperfect Markets
Reference
Andrew Rhodes, and Jidong Zhou, “Personalized Pricing and Competition”, TSE Working Paper, n. 22-1333, May 2022, revised March 2024.
See also
Published in
TSE Working Paper, n. 22-1333, May 2022, revised March 2024