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.
JEL codes
- D21: Firm Behavior: Theory
- D43: Oligopoly and Other Forms of Market Imperfection
- D82: Asymmetric and Private Information • Mechanism Design
Replaces
Andrew Rhodes, and Jidong Zhou, “Personalized Pricing and Competition”, TSE Working Paper, n. 22-1333, May 2022, revised March 2024.
Reference
Andrew Rhodes, and Jidong Zhou, “Personalized Pricing and Competition”, American Economic Review, vol. 114, n. 7, July 2024, p. 2141–2170.
Published in
American Economic Review, vol. 114, n. 7, July 2024, p. 2141–2170