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TitlePersonalized prices in a delivered pricing model with a price sensitive demand
Author(s)Esteves, Rosa Branca
Shuai, Jie
KeywordsPricing model
Price sensitive demand
Issue date2022
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Abstract(s)This paper provides a first assessment of the profit and welfare effects of firms’ ability to charge personalized prices where consumer demand is sensitive to price changes. In a mill pricing model, regardless of demand elasticity, personalized priicing (PP) raises consumer surplus at the expense of profits. In contrast, in a delivered pricing model, if demand is sufficiently elastic, PP boosts profits at the expense of consumer surplus and overall welfare. Moving from PP in a mill to a delivery pricing model, benefits industry profits and harms consumer surplus and welfare
TypeWorking paper
Publisher version
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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