Behavior Based Price Personalization Under Vertical Product Dfferentiation

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Behavior Based Price Personalization Under Vertical Product Dfferentiation

Author : Paolo G. Garella
Publisher :
ISBN 13 :
Total Pages : 25 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Behavior Based Price Personalization Under Vertical Product Dfferentiation by : Paolo G. Garella

Download or read book Behavior Based Price Personalization Under Vertical Product Dfferentiation written by Paolo G. Garella and published by . This book was released on 2020 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study price personalization in a two period duopoly with vertically differentiated products. In the second period a firm knows the purchase history of all customers, as in the standard Behavior Based Price Discrimination models. However in the second period it also has detailed personal information on its own customers, enabling it to quote personalized prices. The analysis reveals that there exists a natural market (nm) for each firm, defined as the set of customers that cannot be poached by the rival in period two. Since in equilibrium all contestable consumers belong to the largest nm, poaching will only be one way. The firm with the largest nm, has highest profits, but not necessarily the largest market share. All consumers gain from price personalization..Profits are lower than under uniform pricing. Quality choice is well defined for the low quality and a quality dfferential arises, though the exact choice for the high quality depends upon the cost specification.

Market Dominance and Behavior-Based Pricing Under Horizontal and Vertical Differentiation

Author : Thomas Gehrig
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Market Dominance and Behavior-Based Pricing Under Horizontal and Vertical Differentiation by : Thomas Gehrig

Download or read book Market Dominance and Behavior-Based Pricing Under Horizontal and Vertical Differentiation written by Thomas Gehrig and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We evaluate behavior-based price discrimination from an antitrust perspective by focusing on an industry with inherited market dominance. Under horizontal differentiation behavior-based pricing does not by itself lead to persistence of dominance unless the dominant firm is protected by significantly higher switching costs than its small rival. This result continues to hold even if the dominant firm can use behavior-based pricing to compete against an entrant with no access to consumers' purchase histories. Under vertical differentiation behavior-based pricing enhances the dominance of the high-quality seller and, hence, consumer welfare.

The Perils of Behavior-Based Personalization

Author : Juanjuan Zhang
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis The Perils of Behavior-Based Personalization by : Juanjuan Zhang

Download or read book The Perils of Behavior-Based Personalization written by Juanjuan Zhang and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Ldquo;Behavior-based personalizationrdquo; has gained popularity in recent years, whereby businesses offer personalized products based on consumers' purchase histories. This paper highlights two perils of behavior-based personalization in competitive markets. First, although purchase histories reveal consumer preferences, competitive exploitation of such information damages differentiation, similar to the classic finding that behavior-based price discrimination intensifies price competition. With endogenous product design, there is yet a second peril. It emerges when forward-looking firms try to avoid the first peril by suppressing the information value of purchase histories. Ideally, if a market leader serves all consumers on day one, purchase histories contain no information about consumer preferences. However, knowing that their rivals are willing to accommodate a market leader, firms are more likely to offer a mainstream design at day one, which jeopardizes differentiation. Based on this understanding, I investigate how the perils of behavior-based personalization change under alternative market conditions, such as firms' better knowledge about their own customers, consumer loyalty and inertia, consumer self-selection, and the need for classic designs.

Behavior-based Price Discrimination and Product Choice

Author : Chongwoo Choe
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (118 download)

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Book Synopsis Behavior-based Price Discrimination and Product Choice by : Chongwoo Choe

Download or read book Behavior-based Price Discrimination and Product Choice written by Chongwoo Choe and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study a two-period model of behavior-based price discrimination in Fudenberg and Tirole (2000) but allow firms to make product choice in the first period. We show that the only possible equilibrium involves maximal differentiation. This is in contrast to Choe et al. (2018) where equilibrium features less than maximal differ- entiation when competition is in personalized pricing. Thus, our result highlights an important interplay between the type of price competition and product choice.

Personalized Pricing and Quality Differentiation

Author : Anindya Ghose
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Personalized Pricing and Quality Differentiation by : Anindya Ghose

Download or read book Personalized Pricing and Quality Differentiation written by Anindya Ghose and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop an analytical framework to investigate the competitive implications of personalized pricing technologies (PP). These technologies enable first-degree price discrimination: firms charge different prices to different consumers, based on their willingness to pay. We first show that, even though a monopolist makes a higher profit with PP, its optimal quality is the same with or without PP. Next, we show that in a duopoly setting, personalized pricing adds value only if it is associated with product differentiation. We then consider a model of vertical product differentiation, and show how personalized pricing on the Internet affects firms' choices of quality differentiation in a competitive scenario. There are two equilibria. We find that, when the PP firm has a high quality both firms raise their qualities, relative to the uniform pricing case. Conversely, when the PP firm has low quality, both firms lower their qualities. While it is optimal for the firm adopting PP to increase product differentiation, the non-PP firm seeks to reduce differentiation by moving in closer in the quality space. Our model also points out firms' optimal pricing strategies with PP, which may be non-monotonic in consumer valuations. Depending on the convexity of the marginal cost function, we outline the incentives of firms to deploy such technologies. Our model shows it is an optimal strategy for the low quality firm to adopt PP, if the other firm does not. Regardless of whether the low quality firm has PP, the high quality firm should adopt PP only if the cost function is not too convex. Next, if both firms acquire PP, then both firms earn lower profits than in the case where neither firm has PP. Essentially, they are trapped in a prisoner's dilemma. Finally, we show that, consumer surplus is highest when both firms adopt PP. Thus, despite the threat of first degree price discrimination, personalized pricing with competing firms can lead to an overall increase in consumer welfare.

Production and Operations Management

Author : Jorge Vargas Florez
Publisher : Springer Nature
ISBN 13 : 3031068629
Total Pages : 560 pages
Book Rating : 4.0/5 (31 download)

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Book Synopsis Production and Operations Management by : Jorge Vargas Florez

Download or read book Production and Operations Management written by Jorge Vargas Florez and published by Springer Nature. This book was released on 2022-10-03 with total page 560 pages. Available in PDF, EPUB and Kindle. Book excerpt: This proceedings volume convenes selected, peer-reviewed contributions presented at the POMS 2021 – International Conference on Production and Operations Management, which was virtually held in Lima, Peru, December 2-4, 2021. This book presents results in the field of Operations Management of key relevance to practitioners, instructors, and students. Topics focus on Operations Management, Logistics and Supply Chain Management, and Industrial and Production Engineering and Management, where mathematics and its applications play a role. In this work, readers will find a colorful collection of real-world case studies, accompanied by operations research-based managerial models. They touch on myriad topics, ranging from Artificial Intelligence and Data Analytics in Operations, Defense, Tourism, and other emerging issues in Operations Management to Healthcare Operations Management and Humanitarian Operations and Crisis Management. The POMS Lima 2021 International Conference has been organized by the Latin America & Caribbean Chapter of the Production and Operations Management Society, the most renowned professional and academic organization representing the interests of production and operations management professionals and academicians around the world. Since 2018, POMS International Conferences have been organized by POMS-LA, the first venue being in Rio de Janeiro, Brazil. Venue 2021 event was hosted by the Pontifical Catholic University of Peru and Pacific University, two Peruvian Latin-American leading academic institutions from Peru.

Behavior-based Personalized Pricing when Firms Can Share Customer Information

Author : Chongwoo Choe
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (118 download)

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Book Synopsis Behavior-based Personalized Pricing when Firms Can Share Customer Information by : Chongwoo Choe

Download or read book Behavior-based Personalized Pricing when Firms Can Share Customer Information written by Chongwoo Choe and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study a model of behavior-based price discrimination where firms can agree to share customer information that can be used for personalized pricing. We show that firms are better off sharing customer information as it softens up-front competition when they gather information, consumers are worse off as a result, but total surplus can increase thanks to the improved quality of matching between firms and consumers.

Economics and Information Systems

Author : Terrence Hendershott
Publisher : Elsevier Science Limited
ISBN 13 : 9780444517715
Total Pages : 692 pages
Book Rating : 4.5/5 (177 download)

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Book Synopsis Economics and Information Systems by : Terrence Hendershott

Download or read book Economics and Information Systems written by Terrence Hendershott and published by Elsevier Science Limited. This book was released on 2006-12-28 with total page 692 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contains chapters that focus on the individual interrelated subjects regarding the economics of information systems: the adoption and diffusion of information technologies; the pricing of data communications; the means and tactics firms us to compete with each other; and the manner in which firms interact with and distribute goods to customers.

Market Dominance and Behaviour-based Pricing Under Horizontal and Vertical Differentiation

Author : Thomas Gehrig
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (187 download)

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Book Synopsis Market Dominance and Behaviour-based Pricing Under Horizontal and Vertical Differentiation by : Thomas Gehrig

Download or read book Market Dominance and Behaviour-based Pricing Under Horizontal and Vertical Differentiation written by Thomas Gehrig and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Quality and Price Personalization Under Customer Recognition

Author : Didier Laussel
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Quality and Price Personalization Under Customer Recognition by : Didier Laussel

Download or read book Quality and Price Personalization Under Customer Recognition written by Didier Laussel and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We present a model of market hyper-segmentation, where a monopolist acquires within a short time all information about the preferences of consumers who purchase its vertically differentiated products within a given period. The firrm offers a new price/quality schedule after each commitment period. Lower consumer types may have an incentive to delay their purchases until next period to obtain a better introductory offer to new customers. The monopolist counters this incentive by offering higher informational rents. Considering the dynamic game played by the monopolist and its customers, we find that there is always a Markov perfect equilibrium (MPE) in which the firm immediately sells the good to all its customers, offering the Mussa-Rosen static equilibrium schedule to first time customers (and getting full commitment profits). However, if the commitment period between two offers is long enough, there is another MPE, where the number of customers that are served expands only gradually. Contrary to the Coasian result for a durable-good monopoly, we find that in both equilibria the profit of the monopolist increases (and the consumers' expected surplus decreases) as the interval of commitment shrinks. The model yields policy implications for regulation on information collection and commitment period.

Behavior-based Personalization

Author : João G. Violante
Publisher :
ISBN 13 :
Total Pages : 55 pages
Book Rating : 4.:/5 (75 download)

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Book Synopsis Behavior-based Personalization by : João G. Violante

Download or read book Behavior-based Personalization written by João G. Violante and published by . This book was released on 2011 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: The personalization of services and products offered to customers is becoming crucial for the success of companies. Firms that can maintain a personalized relationship with their customers will not only gain an advantage from competitors but will also benefit from having more loyal and valuable customers. The recent advances in technology and the associated cost reduction are allowing companies to gather information about their customers and their behavior in an easy and inexpensive way. This collection and analysis of behavior-based information increases the companies' knowledge about their customers and allows a more personalized approach. This thesis studies what has been accomplished in the domain of behavior-based personalization and in more detail what are the techniques and strategies being used and how companies can take advantage of its applications. Moreover, this thesis discusses the critical role of personalization in building effective customer relationships management (CRM) strategies.

Behavioral Consequences of Dynamic Pricing

Author : David Prakash
Publisher : BoD – Books on Demand
ISBN 13 : 3756863514
Total Pages : 155 pages
Book Rating : 4.7/5 (568 download)

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Book Synopsis Behavioral Consequences of Dynamic Pricing by : David Prakash

Download or read book Behavioral Consequences of Dynamic Pricing written by David Prakash and published by BoD – Books on Demand. This book was released on 2022-08-19 with total page 155 pages. Available in PDF, EPUB and Kindle. Book excerpt: Digital technologies are driving the application of dynamic pricing. Today, this pricing strategy is used not only for perishable products such as flights or hotel rooms, but for almost any product or service category. With dynamic pricing, retailers frequently adjust their prices over time to respond to factors such as demand, their supply and that of competitors, or the time of sale. Additionally, dynamic pricing allows retailers to take advantage of a large share of consumers' willingness to pay while avoiding losses from unsold products. Ultimately, this can lead to an increase in revenue and profit. However, the application of dynamic pricing comes with great challenges. In addition to the technological implementation, companies have to take into account that dynamic pricing can cause complex and unintended behavioral consequences on the consumer side. The key objective of this dissertation is to provide a deeper understanding of the impact of dynamic pricing on consumer behavior. To this end, this dissertation presents insights from four perspectives. First, how reference prices as a critical component in purchase decisions are operationalized. Second, how customers search for products priced dynamically, differentiated by business and private customers, as well as by different devices used for the search. Third, whether and how dynamic pricing influences the impact of internal reference prices on purchase decisions. Finally, this dissertation demonstrates that consumers perceive price changes as personalized in different purchase contexts, leading to reduced perceptions of fairness and undesirable behavioral consequences.

Price competition with information disparities in a vertically differentiated duopoly

Author : Alberto Cavaliere
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (249 download)

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Book Synopsis Price competition with information disparities in a vertically differentiated duopoly by : Alberto Cavaliere

Download or read book Price competition with information disparities in a vertically differentiated duopoly written by Alberto Cavaliere and published by . This book was released on 2004 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Innovation and Marketing in the Pharmaceutical Industry

Author : Min Ding
Publisher : Springer Science & Business Media
ISBN 13 : 1461478014
Total Pages : 763 pages
Book Rating : 4.4/5 (614 download)

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Book Synopsis Innovation and Marketing in the Pharmaceutical Industry by : Min Ding

Download or read book Innovation and Marketing in the Pharmaceutical Industry written by Min Ding and published by Springer Science & Business Media. This book was released on 2013-10-31 with total page 763 pages. Available in PDF, EPUB and Kindle. Book excerpt: The pharmaceutical industry is one of today’s most dynamic and complex industries, involving commercialization of cutting-edge scientific research, a huge web of stakeholders (from investors to doctors), multi-stage supply chains, fierce competition in the race to market, and a challenging regulatory environment. The stakes are high, with each new product raising the prospect of spectacular success—or failure. Worldwide revenues are approaching $1 trillion; in the U.S. alone, marketing for pharmaceutical products is, itself, a multi-billion dollar industry. In this volume, the editors showcase contributions from experts around the world to capture the state of the art in research, analysis, and practice, and covering the full spectrum of topics relating to innovation and marketing, including R&D, promotion, pricing, branding, competitive strategy, and portfolio management. Chapters include such features as: · An extensive literature review, including coverage of research from fields other than marketing · an overview of how practitioners have addressed the topic · introduction of relevant analytical tools, such as statistics and ethnographic studies · suggestions for further research by scholars and students The result is a comprehensive, state-of-the-art resource that will be of interest to researchers, policymakers, and practitioners, alike.

Price Behavior and Product Differentiation

Author : Harry Lee Johnson
Publisher :
ISBN 13 :
Total Pages : 316 pages
Book Rating : 4.:/5 (2 download)

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Book Synopsis Price Behavior and Product Differentiation by : Harry Lee Johnson

Download or read book Price Behavior and Product Differentiation written by Harry Lee Johnson and published by . This book was released on 1959 with total page 316 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Price-directed Search, Product Differentiation and Competition

Author : Martin Obradovits
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (134 download)

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Book Synopsis Price-directed Search, Product Differentiation and Competition by : Martin Obradovits

Download or read book Price-directed Search, Product Differentiation and Competition written by Martin Obradovits and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Especially in many online markets, consumers can readily observe prices, but may need to further inspect products to assess their suitability. We study the effects of product differentiation and search costs on competition and market outcomes in a tractable model of price-directed consumer search. We find that (i) firms' equilibrium pricing always induces efficient search behavior, (ii) for relatively large product differentiation, welfare distortions still occur because some consumers (may) forgo consumption, and (iii) lower search costs lead to stochastically higher prices, increasing firms' expected profits and decreasing their frequency of sales. Consumer surplus often falls when search costs decrease.

Microeconomics, Competition and Strategic Behaviour

Author : Markus Thomas Münter
Publisher : UTB
ISBN 13 : 3825259080
Total Pages : 421 pages
Book Rating : 4.8/5 (252 download)

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Book Synopsis Microeconomics, Competition and Strategic Behaviour by : Markus Thomas Münter

Download or read book Microeconomics, Competition and Strategic Behaviour written by Markus Thomas Münter and published by UTB. This book was released on 2022-09-05 with total page 421 pages. Available in PDF, EPUB and Kindle. Book excerpt: Microeconomics is not applied math – frameworks in this book are regularly in use in daily managerial practice and strategic decision-making. Numerous case studies cover price discrimination, economies of scale, digital business models, game theory, dealing with uncertainty, entry barriers or sunk costs – all of which are crucial for understanding market dynamics and competitive behaviour.