Discriminating against captive customers
We analyze a market where some consumers only consider buying from a specific seller while other consumers choose the best deal from several sellers. When sellers are able to discriminate against their captive customers, we show that discrimination harms consumers in aggregate relative to the situat...
| Main Authors: | , |
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| Format: | Journal article |
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American Economic Association
2019
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| _version_ | 1826280819023413248 |
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| author | Armstrong, M Vickers, J |
| author_facet | Armstrong, M Vickers, J |
| author_sort | Armstrong, M |
| collection | OXFORD |
| description | We analyze a market where some consumers only consider buying from a specific seller while other consumers choose the best deal from several sellers. When sellers are able to discriminate against their captive customers, we show that discrimination harms consumers in aggregate relative to the situation with uniform pricing when sellers are approximately symmetric, while the practice tends to benefit consumers in sufficiently asymmetric markets. We also show how the asymmetry of markets may be affected by the information that firms have on consumer captivity. |
| first_indexed | 2024-03-07T00:19:27Z |
| format | Journal article |
| id | oxford-uuid:7c054611-6877-45f3-a44b-2b3a5b8ddc54 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T00:19:27Z |
| publishDate | 2019 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | oxford-uuid:7c054611-6877-45f3-a44b-2b3a5b8ddc542022-03-26T20:54:19ZDiscriminating against captive customersJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:7c054611-6877-45f3-a44b-2b3a5b8ddc54Symplectic Elements at OxfordAmerican Economic Association2019Armstrong, MVickers, JWe analyze a market where some consumers only consider buying from a specific seller while other consumers choose the best deal from several sellers. When sellers are able to discriminate against their captive customers, we show that discrimination harms consumers in aggregate relative to the situation with uniform pricing when sellers are approximately symmetric, while the practice tends to benefit consumers in sufficiently asymmetric markets. We also show how the asymmetry of markets may be affected by the information that firms have on consumer captivity. |
| spellingShingle | Armstrong, M Vickers, J Discriminating against captive customers |
| title | Discriminating against captive customers |
| title_full | Discriminating against captive customers |
| title_fullStr | Discriminating against captive customers |
| title_full_unstemmed | Discriminating against captive customers |
| title_short | Discriminating against captive customers |
| title_sort | discriminating against captive customers |
| work_keys_str_mv | AT armstrongm discriminatingagainstcaptivecustomers AT vickersj discriminatingagainstcaptivecustomers |