Harmonic price targeting
- Author(s)
- Daniel Garcia
- Abstract
This paper studies third-degree price discrimination in a classical model of price competition with differentiated products. Firms charge different prices to different consumers, based on their estimate of their price sensitivity. If the market is fully covered and information is symmetric, more accurate information has a pure redistributive effect, leading to higher profits but lower consumer welfare. If the market is not covered, information always benefit firms but the welfare effects are ambiguous. If information is asymmetric, firms benefit from more information, but less so than in the symmetric case, and total welfare depends on the extent of this asymmetry. I conclude that firms have strong incentives to share information about consumer tastes.
- Organisation(s)
- Department of Economics
- Journal
- Information Economics and Policy
- Volume
- 60
- No. of pages
- 6
- ISSN
- 0167-6245
- DOI
- https://doi.org/10.1016/j.infoecopol.2022.100984
- Publication date
- 09-2022
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 502013 Industrial economics
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Management, Monitoring, Policy and Law
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/harmonic-price-targeting(a5e7ca40-8ee2-4c59-b489-61cc7010aeb7).html