Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170616
Authors: 
Gnutzmann, Hinnerk
Year of Publication: 
2014
Series/Report no.: 
Working Paper, Dipartimento di Economia e Finanza (DISCE), Università Cattolica del Sacro Cuore 19
Abstract: 
Price discrimination by consumer's purchase history is widely used in regulated industries, such as communication or utilities, both by incumbents and entrants. I show that such discrimination can have surprisingly negative welfare effects { even though prices and industry profits fall, so does consumer surplus. Earlier studies that did not allow entrants to discriminate or assumed symmetric firms yielded sharply different results, the pro{competitive effect of price discrimination are stronger in these settings. Imposing a pricing constraint on incumbent's discrimination leads the entrant to discriminate more heavily, but still improves both consumer and producer welfare.
Subjects: 
History{based price discrimination
asymmetric price discrimination
switching cost
JEL: 
L13
L41
Document Type: 
Working Paper

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