Behavior-Based Price Discrimination and Customer Recognition

Drew Fudenberg · J. Miguel Villas‐Boas

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Consumer Market Behavior and Pricing Merger and Competition Analysis Supply Chain and Inventory Management

Abstract

When firms are able to recognize their previous customers, they may be able to use their information about the consumers’ past purchases to offer different prices and/or products to consumers with different purchase histories. This article surveys the literature on this “behavior-based price discrimination.”

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1988The Theory of Industrial Organization 1992Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt 1978Monopoly and product quality 1982Rational cooperation in the finitely repeated prisoners' dilemma 1990Asymmetric Information, Bank Lending and Implicit Contracts: A Stylized Model of Customer Relationships 1979On Hotelling's "Stability in Competition"1995Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade 1987Markets with Consumer Switching Costs

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