Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267796 
Year of Publication: 
2022
Series/Report no.: 
ISER Discussion Paper No. 1184
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
Personalized pricing has become a reality through digitization. We examine firms' incentives to adopt one of the three pricing schemes: uniform, personalized, or group pricing in a Hotelling duopoly model. There are two types of consumer groups that are heterogeneous in their mismatch costs. We show that both firms employ personalized pricing in equilibrium regardless of the heterogeneity of consumer groups. If the consumer groups' heterogeneity is significant, the profits are higher when both firms use personalized pricing than when they employ uniform pricing; otherwise, the latter profits are higher than the former. Profits are highest when firms employ group pricing among the three cases. The ranking of consumer welfare among the three cases is opposite to that of profits.
Subjects: 
Personalized pricing
Group pricing
Heterogeneous consumer types
Hotelling model
JEL: 
L13
D43
Document Type: 
Working Paper

Files in This Item:
File
Size
544.63 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.