Author: Sumit Shrivastav
Title: Profitability of Behavior Based Price Discrimination
Abstract: In this paper, we analyze the profitability of price discrimination based on recognition of consumers’ brand preferences, in a duopoly model with switching costs. We show that, in contrast to existing studies, price discrimination results into higher profits than uniform pricing if consumers are heterogeneous in terms of brand preferences and the extent of such heterogeneity is sufficiently high.
Keywords: BBPD; Consumer Recognition; Price Discrimination
JEL Code: D43, L13