Can personalized pricing be a winning strategy in oligopolistic markets with heterogeneous demand customers? Yes, it can

Esteves, Rosa Branca

doi:10.1016/j.ijindorg.2022.102874

Cited by 13 publications

(14 citation statements)

References 30 publications

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“…However, the preferable ratio of type H to achieve the reversal result (around 20%) differs from ours (around 50%) (see Figure 6) because of the double meaning of q in Esteves (2022): high price elasticity and high demand. The latter meaning distorts the ratio in Esteves (2022).…”

Section: Decisions On Pricing Schemesmentioning

confidence: 98%

“…We also consider the endogenous choices of pricing schemes. Given these differences, our study complements Esteves (2022).…”

Section: Introductionmentioning

confidence: 95%

“…In a recent study, Esteves (2022) considers a static setting where personalized pricing can become a winning strategy for competing firms. The intuition relies on the heterogeneity in the quantity demanded by consumers.…”

Section: Introductionmentioning

confidence: 99%

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Personalized pricing with heterogeneous mismatch costs

Matsushima,

Mizuno,

Pan

2023

Southern Economic Journal

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Personalized pricing has become a reality through digitization. We examine firms' incentives to adopt one of the three pricing schemes: uniform, personalized, or group pricing in a Hotelling duopoly model. There are two types of consumer groups that are heterogeneous in their mismatch costs. We show that both firms employ personalized pricing in equilibrium regardless of the heterogeneity of consumer groups. If the consumer groups' heterogeneity is significant, the profits are higher when both firms use personalized pricing than when they employ uniform pricing; otherwise, the latter profits are higher than the former. Profits are highest when firms employ group pricing among the three cases. The ranking of consumer welfare among the three cases is opposite to that of profits.

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Section: Decisions On Pricing Schemesmentioning

confidence: 98%

“…We also consider the endogenous choices of pricing schemes. Given these differences, our study complements Esteves (2022).…”

Section: Introductionmentioning

confidence: 95%

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Personalized pricing with heterogeneous mismatch costs

Matsushima,

Mizuno,

Pan

2023

Southern Economic Journal

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“…Perceived price is the consumer's perception of the relative price or sacrifice that must be incurred to obtain a product compared to the price or contribution of other similar products (Esteves, 2022;Z. Liu et al, 2022;Wu et al, 2022).…”

Section: Perceived Pricementioning

confidence: 99%

The Influence of Perceived Price on Revisit Intention through Social Influence for Adaptive Reuse Building in the Old City of Jakarta

Maulina

Budiarti

Ruslan

et al. 2022

ijss

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Kota Tua, also known as old Batavia (Old Batavia) was inaugurated as a cultural heritage site by the governor of Jakarta, Ali Sadikin, in 1972. In order to improve Jakarta's Old City area, the government is currently strengthening the revitalization and adaptive reuse process as a goal in increasing long-term investment, as a tourism area for the tourism sector, and as a promotion of cultural diversity while maintaining the character and value of the historical value of the Old City area. The type of research used in this study is a type of descriptive research with quantitative approach method. Which method of data collection in the form of observation, distribution of questionnaires, and literature study. The population in this study is visitors to the Old City area of Jakarta and the sample size of 261 respondents. The sampling technique used is purposive sampling, that is, those who have ever visited the Old City area of Jakarta. The results showed that perceived price has a positive influence on social influence, social influence has a positive influence on revisit intention, perceived price has a positive influence on revisit intention, and social influence is also a mediation between perceived price and revisit intention.

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“…(Shen and Miguel Villas-Boas, 2018;Esteves and Cerqueira, 2017), behavior-based pricing with vertical differentiation (Garella et al, 2021;Umezawa, 2022), the observability of behavior-based pricing (Li et al, 2020), and fairness concerns when behavior-based pricing practices are observed (Li and Jain, 2016). In response to recent developments in data protection regulations, behavior-based pricing is studied when firms can personalize prices and products (Capponi et al, 2021;Esteves, 2022;Laussel and Resende, 2022), the ability of firms to share customer information (De Nijs, 2017;Choe et al, 2022Choe et al, , 2023, and consumer control over their data (Choe et al, 2018). While there are empirical studies on behavior-based pricing (Asplund et al, 2008;Cosguner et al, 2017), it might prove problematic to disentangle the aforementioned factors and explicitly verify the mechanics of theoretical models.…”

Section: Introductionmentioning

confidence: 99%

On Point Predictions and Reference Dependence in Behavior-Based Pricing Experiments

Tolksdorf

2023

JEBS

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It has been shown that the comparative static results of two-period behavior-based pricing models hold in laboratory experiments, while point predictions do not. This study aims to check whether these findings replicate and to evaluate why observed prices deviate from point predictions. We report observed prices in conformity with point predictions through: (1.) a uniform pricing benchmark, (2.) a replication of a behavior-based pricing experiment, and (3.) a follow-up experiment in which we consider the second period disjointed from the first period. By disjoining the two periods, we show that reference dependence toward first-period prices shifts the second-period pricing behavior of participants upwards. In a post hoc analysis, we show that considering consumers' myopic instead of strategic explains a downward shift in first-period prices and rationalizes prior experimental findings. Volatile price levels affect price-based welfare measures – such as seller profits and total customer costs. We show that transport costs are a robust welfare measure that alleviates the impact of distorted prices. Ultimately, our findings are relevant for the design and assessment of multi-period pricing experiments.

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Can personalized pricing be a winning strategy in oligopolistic markets with heterogeneous demand customers? Yes, it can

Cited by 13 publications

References 30 publications

Personalized pricing with heterogeneous mismatch costs

Personalized pricing with heterogeneous mismatch costs

The Influence of Perceived Price on Revisit Intention through Social Influence for Adaptive Reuse Building in the Old City of Jakarta

On Point Predictions and Reference Dependence in Behavior-Based Pricing Experiments

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