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Author: Yihong Hu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
With the rise of big data technology, an online platform can easily gather customer information to engage in price discrimination and obtain additional profits. Whether to share information remains an unsolved strategy decision for the platform. We employ a game-theoretic model to characterize the interplay of information sharing by the platform and the pricing strategies of two firms. We find that the seller always has incentives to acquire information, while the platform is not always willing to share information. With different combinations of the commission rate and the new customer ratio, the equilibrium of the overall system has three possible results where the information is always used for price discrimination by either one party or two parties. With a high commission rate and a low new customer ratio, the platform no longer pursues a demand for its own product and lets the seller occupy the whole market, which leads to the lowest consumer surplus and social welfare. We finally show that in most cases, prohibiting information sharing increases consumer surplus and social welfare, verifying the necessity of regulation. These results could provide useful guidelines for platform managers and regulators to better design information sharing and price discrimination policies.
Author: Yihong Hu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
With the rise of big data technology, an online platform can easily gather customer information to engage in price discrimination and obtain additional profits. Whether to share information remains an unsolved strategy decision for the platform. We employ a game-theoretic model to characterize the interplay of information sharing by the platform and the pricing strategies of two firms. We find that the seller always has incentives to acquire information, while the platform is not always willing to share information. With different combinations of the commission rate and the new customer ratio, the equilibrium of the overall system has three possible results where the information is always used for price discrimination by either one party or two parties. With a high commission rate and a low new customer ratio, the platform no longer pursues a demand for its own product and lets the seller occupy the whole market, which leads to the lowest consumer surplus and social welfare. We finally show that in most cases, prohibiting information sharing increases consumer surplus and social welfare, verifying the necessity of regulation. These results could provide useful guidelines for platform managers and regulators to better design information sharing and price discrimination policies.
Author: Huiqi Guan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We consider a distribution channel comprising of a supplier and a retailer, where the retailer can collect customer data, use it to profile them, and personalize its retail prices based on this information. Depending on the retailer's data collection ability, two personalized pricing strategies are studied. The retailer uses Behavior-Based Pricing (BBP) if it can only tell customers with any prior history apart; the retailer uses Fully Personalized Pricing (FPP) if it can accurately predict the customers' true willingness-to-pay. Moreover, when the retailer shares the collected customer data, either in full or to a limited extent, with the supplier, the latter can also adopt the personalized pricing strategies in setting the wholesale price. Using a two-period game-theoretic model that considers the strategic behavior of the customers, we solve for the equilibrium results and compare them across different scenarios. Our analysis uncovers several counter-intuitive findings that generate interesting managerial insights. First, we show that the supplier and the retailer may have conflicting attitudes towards adopting personalized pricing strategies. Similarly, they may have opposing preferences on the sharing level of customer data. As a function of the degree of strategic behavior of customers (modeled using a discount factor of future profits), we determine the most-likely scenario: When the discount factor is either very small or very large, the scenario with partial information sharing is most likely to occur; otherwise, no information sharing is the likely outcome. In addition, we show that even though personalized pricing leads to price segmentation, it can increase overall consumer surplus and social welfare due to the enhanced market expansion effect. Finally, we discuss the potential benefit of decentralization and show that compared to an integrated firm, total profits for the decentralized channel can be higher if the retailer uses FPP and the supplier does not.
Author: Chongwoo Choe
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
We study a model of behavior-based price discrimination where firms can agree to share customer information that can be used for personalized pricing. We show that firms are better off sharing customer information as it softens up-front competition when they gather information, consumers are worse off as a result, but total surplus can increase thanks to the improved quality of matching between firms and consumers.
Author: Enrique Bigne
Publisher:
ISBN: 9783658248796
Category : Branding (Marketing)
Languages : en
Pages : 240
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Book Description
This book addresses challenges and opportunities in research and management related to new advertising and consumer practices in brand communications with multiple touchpoints. It specifically relates to new insights into how profitability and customer engagement are affected by multiple and very diverse consumer touchpoints in an omni-connected world. Advances in Advertising Research are published by the European Advertising Academy (EAA). This volume is a selective collection of research presented at the 17th International Conference in Advertising (ICORIA), which was held in Valencia (Spain) in June 2018. The conference gathered more than 180 participants from over 27 countries all over the world. Contents Digital Communications and Multiple Touchpoints Creativity in Advertising Consumer Responses to Multiple Communications Target Groups Researchers, instructors, and students in the fields of advertising, communication, marketing and media management, as well as practitioners in these areas The Editors Enrique Bigne is Professor of Marketing at the University of Valencia, Spain. Sara Rosengren is Professor of Marketing and Retailing at the Stockholm School of Economics, Sweden.
Author: Anshuman Khare
Publisher: Springer
ISBN: 3319444689
Category : Computers
Languages : en
Pages : 327
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Book Description
This book explores the factors that make digital disruption possible and the effects this has on existing business models. It takes a look at the industries that are most susceptible to disruption and highlights what executives can do to take advantage of disruption to re-invent their business model. It also examines the pivotal role that technology plays in creating new dynamics to business operations and forcing business model changes. Adoption of digital technology has caused process disruptions in a number of industries and led to new business models (e.g., Über, AirBnb) and new products. In addition to covering some of the more popular and well known examples, this book targets not so obvious disruptions in the education sector and in services and changing business models. Phantom Ex Machina: Digital Disruption’s Role in Business Model Transformation is divided into six parts. The book begins with an introduction to digital disruption and why it matters. The next part of the book focuses on business strategy which includes case studies on the impact of social media and how digital disruption changes pricing strategies and price models. For part three, the authors observe technology’s role in digital disruptions. Chapters cover how 3D printing is challenging existing business models and how the automotive industry is innovating with new perspectives. Part four covers higher education, recognizing digital disruption’s transformation in graduate management education. Part five centers upon the service industry with a look at virtual teams and the emergence of virtual think tanks. Finally the book concludes with a look to the future, embracing disruptions.
Author: Nripendra P. Rana
Publisher: Springer Nature
ISBN: 3030243745
Category : Business & Economics
Languages : en
Pages : 337
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Book Description
This book examines issues and implications of digital and social media marketing for emerging markets. These markets necessitate substantial adaptations of developed theories and approaches employed in the Western world. The book investigates problems specific to emerging markets, while identifying new theoretical constructs and practical applications of digital marketing. It addresses topics such as electronic word of mouth (eWOM), demographic differences in digital marketing, mobile marketing, search engine advertising, among others. A radical increase in both temporal and geographical reach is empowering consumers to exert influence on brands, products, and services. Information and Communication Technologies (ICTs) and digital media are having a significant impact on the way people communicate and fulfil their socio-economic, emotional and material needs. These technologies are also being harnessed by businesses for various purposes including distribution and selling of goods, retailing of consumer services, customer relationship management, and influencing consumer behaviour by employing digital marketing practices. This book considers this, as it examines the practice and research related to digital and social media marketing.
Author: Yablonsky, Sergey
Publisher: IGI Global
ISBN: 1522554580
Category : Business & Economics
Languages : en
Pages : 204
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Book Description
Rapid technological advancements have the ability to positively or negatively impact corporate growth and success. Professional leaders and decision makers must consider such advancements when designing and implementing new policies in preparation for the sustainable future of the business environment. Multi-Sided Platforms (MSPs) and Sharing Strategies in the Digital Economy: Emerging Research and Opportunities is a critical scholarly resource that examines platform strategies and business models with a focus on multi-sided platform business models. Featuring coverage on a broad range of topics, such as digital collaboration, business ecosystem, and platform value chain, this book is an ideal resource for managers, researchers, academics, practitioners, and students interested in recent trends in business models in the digital age.
Author: Stefano Colombo
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We consider a duopoly model where firms can identify only a share of consumers, which is positively correlated with the consumer' preferences. Firms charge personalized prices to the consumers they can recognize and a uniform price to the rest of consumers. The firms' available information is given by the combination of two factors: the intensive margin, which determines the share of consumers the firms can recognize in each single location, and the extensive margin, which determines how many locations the firms can identify. Different market configurations emerge according to the size of these margins. We characterize the values of the intensive and extensive margins that maximize firms' profits, and we show that profits are non-monotonic. We also show that the composition, in addition to the size, of the available information - i.e., the mix of these margins - affects firms' profits significantly. Implications for regulatory policies concerning the protection of consumers' information are finally discussed.
Author: S. Nageeb Ali
Publisher:
ISBN:
Category : Consumer goods
Languages : en
Pages : 37
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Book Description
A concern central to the economics of privacy is that firms may use consumer data to price discriminate. A common response is that consumers should have control over their data and the ability to choose how firms access it. Since firms draw inferences based on both the data seen as well as the consumer's disclosure choices, the strategic implications of this proposal are unclear. We investigate whether such measures improve consumer welfare in monopolistic and competitive environments. We find that consumer control can guarantee gains for every consumer type relative to both perfect price discrimination and no personalized pricing. This result is driven by two ideas. First, consumers can use disclosure to amplify competition between firms. Second, consumers can share information that induces a seller--even a monopolist--to make price concessions. Furthermore, whether consumer control improves consumer surplus depends on both the technology of disclosure and the competitiveness of the marketplace. In a competitive market, simple disclosure technologies such as "track / do-not-track" suffice for guaranteeing gains in consumer welfare. However, in a monopolistic market, welfare gains require richer forms of disclosure technology whereby consumers can decide how much information they would like to convey.
Author: Ramsi Woodcock
Publisher:
ISBN:
Category :
Languages : en
Pages : 63
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Book Description
The advance of the information age will allow firms to engage in personalized pricing, a form of price discrimination that is profitable for firms, but unambiguously harmful to consumers. Antitrust can protect consumers from personalized pricing--also called perfect price discrimination--by condemning the steps firms must take to prevent resellers from undermining firms' personalized pricing schemes. To personalize prices successfully, a firm must prevent those to whom the firm wishes to charge low prices from reselling the product to those to whom the firm wishes to charge high prices. Otherwise, resellers will compete away any difference in prices. But such steps amount to conduct that harms competitors--here, resellers--and ultimately the consumers who pay the personalized prices that result. A firm that personalizes prices must therefore do the three things that together constitute illegal monopolization under Section 2 of the Sherman Act: harm competition, and consumers, in order profitably to raise prices. The right to refuse to deal with competitors, which would normally exempt this conduct from antitrust scrutiny, does not apply to personalized pricing because an available remedy--an order prohibiting personalized pricing, but not forcing firms to sell to resellers--does not lead to the forced sharing and judicial price administration that the right to refuse to deal is meant to avoid.
