Discriminating against Captive Customers

A-Tier
Journal: American Economic Review: Insights
Year: 2019
Volume: 1
Issue: 3
Pages: 257-72

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:aea:aerins:v:1:y:2019:i:3:p:257-72
Journal Field
General
Author Count
2
Added to Database
2026-01-24