Investment in customer recognition and information exchange

Abstract

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Customer Privacy and Competition

“…Our evaluation of information exchange shares this perspective with Liu and Serfes (), Jentzsch et al. (), and Shy and Stenbacka (). However, we evaluate information exchange within the framework of a more general analysis of different degrees of privacy protection, whereas in Liu and Serfes () and Jentzsch et al.…”

“…Our model evaluates information exchange from a very different perspective, namely as a mechanism to expand the firms' knowledge of consumer-specific preferences, conditional on which the firms can fine-tune targeted pricing. Our evaluation of information exchange shares this perspective with Liu and Serfes (2006), Jentzsch et al (2013), and Shy and Stenbacka (2013). However, we evaluate information exchange within the framework of a more 5.…”

Price Discrimination with Private and Imperfect Information

“…As in the present paper, Liu and Serfes (2004) have found that moving from no discrimination (no information) to discrimination is bad for industry profits and good for consumer surplus. However, conditional on the availability of information, they have 14 For other recent papers on BBPD and customer recognition, see also Caillaud and De Nijs (2011), Chen and Pearcy (2010), Esteves (2010), Esteves and Vasconcelos (2014), Esteves and Reggiani (2014), Gehrig et al (2011Gehrig et al ( , 2012, Ghose and Huang (2009), Ouksel and Eruysal (2011, 2013. 15 They define targetability as a firm's ability to predict the preferences and purchase behaviors of individual consumers.…”

Behavior-based price discrimination and customer information sharing

“…In the current analysis, firms know that their products are substitutes, and information sharing enables them to refine their knowledge regarding each consumer's preferences. Shy and Stenbacka (2013) investigate how information exchange affects the incentives of firms to invest in the costly acquisition of information on customers tastes. They show that the exchange of acquired information is bad for firms' profits and hurts consumers, but that such exchanges do not occur in equilibrium.…”