Irrelevance of personalized pricing under strategic market segmentation

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Tác giả: Xiaoxiao Hu, Haoran Lei

Ngôn ngữ: eng

Ký hiệu phân loại: 658.8 Management of marketing

Thông tin xuất bản: 2023

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 196692

A multiproduct seller is more informed than consumers about the value of her products to consumers. The seller posts a price list and segments the market through cheap-talk communication. We find that when both seller's and consumers' incentive-compatibility constraints are satisfied, the seller cannot benefit from personalized pricing (i.e., third-degree price discrimination). Based on that observation, we provide a tractable characterization of seller's maximum equilibrium profits. We apply our analysis to a credence-good setup and discuss when the credence goods seller benefits from communication. The irrelevance result breaks down when we relax seller's incentive-compatibility constraints.Comment: This paper subsumes and generalizes part of the results of a previously circulated working paper under the title "Information transmission in monopolistic credence goods markets."
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