Purchase history and product personalization

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Tác giả: Laura Doval, Vasiliki Skreta

Ngôn ngữ: eng

Ký hiệu phân loại: 665.75 Uses of natural gas and manufactured gases

Thông tin xuất bản: 2021

Mô tả vật lý:

Bộ sưu tập: Báo, Tạp chí

ID: 166561

Comment: Replaced to correct figure placementProduct personalization opens the door to price discrimination. A rich product line allows firms to better tailor products to consumers' tastes, but the mere choice of a product carries valuable information about consumers that can be leveraged for price discrimination. We study this trade-off in an upstream-downstream model, where a consumer buys a good of variable quality upstream, followed by an indivisible good downstream. The downstream firm's use of the consumer's purchase history for price discrimination introduces a novel distortion: The upstream firm offers a subset of the products that it would offer if, instead, it could jointly design its product line and downstream pricing. By controlling the degree of product personalization the upstream firm curbs ratcheting forces that result from the consumer facing downstream price discrimination.
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