Profitability of behavior-based price discrimination

Shrivastav, Sumit

doi:10.1007/s11002-022-09658-z

Cited by 2 publications

(2 citation statements)

References 19 publications

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Section: Literature Reviewmentioning

confidence: 99%

“…Umezawa (2022) analyzed BBPD in an asymmetric duopoly with switching costs and including both vertical and horizontal differentiation; the results show that with either high switching costs or sufficiently large firm asymmetries, BBPD may benefit both firms. Shrivastav (2022) examined the profitability of behavior‐based price discrimination in a duopoly model considering switching costs. They discovered that when firms implement price discrimination based on consumer preferences without considering switching costs, it leads to higher equilibrium profits compared to uniform pricing, particularly when the variation in consumers' preferences is not significantly larger than that in the switching costs.…”

Section: Literature Reviewmentioning

confidence: 99%

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How does cross‐platform externality impact pricing strategies? A two‐stage discriminatory pricing model analysis

Can‐Zhong,

Yi‐Na

2024

Manage Decis Econ

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This study delves into the impact of cross‐platform externality on the pricing strategies of platforms, employing a two‐stage discriminatory pricing model. The research reveals several significant findings. Initially, cross‐platform externality exacerbates the “killing the loyal customers” strategy on the access platform, prompting consumers to favor a “one‐time” consumption approach to avoid potential intensification of this strategy. Furthermore, cross‐platform externality serves as a critical trigger for independent competitive platforms; surpassing a critical consumer threshold leads to a shift from the former “killing the loyal customers” strategy to offering more favorable prices for existing customers. Finally, cross‐platform externality leads to reduced prices for consumers on both platforms in both stages, assuming the drainage effect of the open platform is substantially weaker than its enhancement effect on the cross‐network externality of the access platform. During such instances, the cross‐platform externality proves advantageous to consumers. However, with a strengthening drainage effect and increased merchant attraction by the access platform, both platforms may face potential price increases. Notably, cross‐platform externalities provide access platforms with substantial advantages over independent competitors in terms of user scale and profit levels. This advantage progressively grows as cross‐platform externalities increase. However, for the access platform itself, the influx of consumers from the open platform must surpass a minimal threshold before cross‐platform externalities contribute to an increase in the access platform's profit levels. Consequently, if the objective of engaging in platform discriminatory pricing competition is to overcome competitors, integrating with an open platform proves to be an effective approach. However, if the goal is solely to boost one's own profits, embracing an open platform entails certain risks, necessitating the selection of a platform capable of delivering sufficient traffic.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

How does cross‐platform externality impact pricing strategies? A two‐stage discriminatory pricing model analysis

Can‐Zhong,

Yi‐Na

2024

Manage Decis Econ

View full text Add to dashboard Cite

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The Evolution of Price Discrimination in E-Commerce Platform Trading: A Perspective of Platform Corporate Social Responsibility

Ma,

Guo,

et al. 2024

JTAER

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The widespread use of data in e-commerce has facilitated the implementation of different pricing strategies for platforms and merchants. However, the excessive use of algorithms for differential pricing has sparked discussions about fairness and price discrimination, disrupting the platform trading system. To address this challenge, we adopt an evolutionary game approach to analyze the evolutionary strategies of all parties from the perspective of platform CSR. It is based on a special type of e-commerce platform trading in which major merchants have data analytics capabilities. We construct an evolutionary game model considering reputation and punishment, explore the impact of different situations and factors on the system’s evolutionary stability strategy, and conduct its verification via simulation experiments. The results show that long-term reputation is the internal driving force for platforms to fulfill responsibilities. The joint punishment of collusion is the external binding force. Consumer complaints are key to restricting merchants’ integrity operation. Moreover, penalties imposed by e-commerce platforms can help eradicate price discrimination. This study provides a new perspective to solve price discrimination in the digital era. Measures based on reputation and punishment can guide platforms to fulfill other social responsibilities.

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Profitability of behavior-based price discrimination

Cited by 2 publications

References 19 publications

How does cross‐platform externality impact pricing strategies? A two‐stage discriminatory pricing model analysis

How does cross‐platform externality impact pricing strategies? A two‐stage discriminatory pricing model analysis

The Evolution of Price Discrimination in E-Commerce Platform Trading: A Perspective of Platform Corporate Social Responsibility

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