Behavior-based price discrimination and customer information sharing

摘要

This article investigates the incentives and effects of rival firms sharing their customers' identities, using a two-period model with behavior-based price discrimination (BBPD). A unilateral information exchange between the two periods takes place in a subgame-perfect equilibrium. This exchange increases the ability of the firms to discriminate prices amongst consumers according to their profiles, and boosts the profitability of BBPD at the customers' expense. (C) 2016 Elsevier B.V. All rights reserved.