{"title":"Behaviour-based pricing with overlapping ownership","authors":"Changying Li, Jianhu Zhang","doi":"10.1111/caje.12758","DOIUrl":null,"url":null,"abstract":"<p>Research has extensively explored why firms use their consumer information to price discriminate between repeat and new customers. This paper incorporates overlapping ownership and explores a more nuanced explanation for the practice. We isolate the different and interactive effects of overlapping ownership in different periods on equilibrium outcomes. In our explanation, firms use overlapping ownership to increase repeat purchase and customer retention and therefore may charge higher prices for both repeat and new customers, when they choose behaviour-based pricing rather than uniform pricing. As a result, if the degree of overlapping ownership is not too small, behaviour-based pricing benefits firms but hurts consumers.</p>","PeriodicalId":47941,"journal":{"name":"Canadian Journal of Economics-Revue Canadienne D Economique","volume":"58 1","pages":"136-168"},"PeriodicalIF":1.3000,"publicationDate":"2025-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Canadian Journal of Economics-Revue Canadienne D Economique","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/caje.12758","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Research has extensively explored why firms use their consumer information to price discriminate between repeat and new customers. This paper incorporates overlapping ownership and explores a more nuanced explanation for the practice. We isolate the different and interactive effects of overlapping ownership in different periods on equilibrium outcomes. In our explanation, firms use overlapping ownership to increase repeat purchase and customer retention and therefore may charge higher prices for both repeat and new customers, when they choose behaviour-based pricing rather than uniform pricing. As a result, if the degree of overlapping ownership is not too small, behaviour-based pricing benefits firms but hurts consumers.
期刊介绍:
The Canadian Journal of Economics (CJE) is the journal of the Canadian Economics Association (CEA) and is the primary academic economics journal based in Canada. The editors seek to maintain and enhance the position of the CJE as a major, internationally recognized journal and are very receptive to high-quality papers on any economics topic from any source. In addition, the editors recognize the Journal"s role as an important outlet for high-quality empirical papers about the Canadian economy and about Canadian policy issues.