Quality and price personalization under customer recognition: A dynamic monopoly model with contrasting equilibria

Abstract

We present a model of market hyper-segmentation, where a monopolist acquires within a short time all information about the preferences of consumers who purchase its vertically di §erentiated products. The Örm o §ers a new price/quality schedule after each commitment period. Lower consumer types may have an incentive to The model yields policy implications for regulations on collection and storage of customers information.

The Influence of Product Quality and Price on Purchasing Decisions at Mitraindo South Tangerang Online Shop

“…One aspect that is also a consideration of consumers in buying a product is also the price factor, where consumers often compare prices with other competitors which are cheaper but also the product is no less competitive. Product price is the sum of all values given by customers to benefit from owning or using a product or service (Laussel, Long, & Resende, 2020;Li, Nagurney, & Yu, 2018;Nair, 2019). According to (Tjiptono, 2007), the price of a product is a monetary unit or another measure including other goods and services exchanged in order to obtain ownership rights or users of an item and service.…”

Profit Effects of Consumers’ Identity Management: A Dynamic Model

“…The evolution of introductory prices is pictured in Figure 1 below for the case = 0:5 and for several values of the privacy cost. 31 This illustrates very neatly the strategic e¤ect: the smaller is c, the higher are the introductory prices and the slower is their rate of decline. 32 .…”

“…That is, we must investigate how the aggregate consumer surplus varies with the privacy cost c. This is most conveniently done by evaluating …rst the overall welfare (de…ned here as the sum of consumer surplus and pro…ts) and then we residually obtain consumers'surplus. 34 In period n 1, the social welfare w n is the sum of three components: (i) the aggregate measure of gross utilities of returning former passive customers (which is equal to the pro…ts the monopolist derives from selling goods to them at their personalized prices, i.e., equation (1)), (ii) the aggregate measure of gross utilities of 31 For the sake of simplicity the …gure is drawn as if n was a continuous variable. 32 Notice that, since p I (n) = 1 1 (K + (1 ) n ) (see Proof of Lemma 3 in the Online Appendix) the evolution of n parallels that of p I (n): 33 The dashed parts of the curves correspond to values of c c F IA ( ); leading to outcomes where all consumers are passive.…”

Quality Differentiation in Durable Goods Monopoly Always Yields Strictly Positive Profits

“…Moreover, starting from any (n) 2 ( ; ]; immediate covering of the remaining part of the market is not an equilibrium strategy. 5 It follows that the market, when just strong, is never covered in a …nite number of periods. Intermediate cases where the market is fully covered in a …nite number of periods N > 1 obtain the super-strong market case when is low and the market is wide ( is great).…”

“…This is not really restrictive. A "weak" market is easily truncated by considering only the "strong", economically viable, segment [ b ; ].3 For a derivation of this constraint seeLaussel et al (2020) 4. For more details seeLaussel et al (2021).…”