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dc.contributor.authorDoğan, Kutsal
dc.contributor.authorHaruvy, E.
dc.contributor.authorRao, R. C.
dc.date.accessioned2011-03-18T11:24:16Z
dc.date.available2011-03-18T11:24:16Z
dc.date.issued2010-03
dc.identifier.issn1573-711X
dc.identifier.urihttp://hdl.handle.net/10679/151
dc.identifier.urihttp://www.springerlink.com/content/7430082206146202/
dc.description.abstractPrice discrimination is generally thought to improve firm profits by allowing firms to extract more consumer surplus. In competition, however, price discrimination may also be costly to the firm because restrictive incentive compatibility conditions may allow the competing firm to gain market share at the discriminating firm’s expense. Therefore, with asymmetric competition, it may be the case that one firm would let the other firm assume the burden of price discrimination. We investigate optimal segmentation in a market with two asymmetric firms and two heterogeneous consumer segments that differ in the importance of price and product attributes. In particular, we investigate second-degree price discrimination under competition with explicit incentive compatibility constraints thus extending prior work in marketing and economics. Focusing on the managerial implications, we explore whether it would be profitable for either or both firms to pursue a segmentation strategy using rebates as a mechanism. We identify conditions under which one or both firms would want to pursue such segmentation. We find that segmentation lessens competition for the less price-sensitive consumer segment and that this results in higher profits to both firms. A key to understanding this result is that segmentation leads to consumer remixing. We establish the key result that if firms are asymmetric in their attractiveness to consumers, the disadvantaged firm in our model is more likely to pursue a segmentation strategy than its rival in equilibrium. We then ask whether this result prevails in practice. To this end, we explore competitive segmentation empirically and are able to verify that disadvantaged firms indeed pursue segmentation through rebates with greater likelihood.en_US
dc.language.isoengen_US
dc.publisherSpringer Science+Business Mediaen_US
dc.relation.ispartofQuantitative Marketing and Economics
dc.rightsopenAccess
dc.titleWho should practice price discrimination using rebates in an asymmetric duopoly?en_US
dc.typeArticleen_US
dc.peerreviewedyesen_US
dc.publicationstatuspublisheden_US
dc.contributor.departmentÖzyeğin University
dc.contributor.authorID(ORCID 0000-0002-4208-6389 & YÖK ID 141828) Doğan, Kutsal
dc.contributor.ozuauthorDoğan, Kutsal
dc.identifier.volume8
dc.identifier.issue1
dc.identifier.startpage61
dc.identifier.endpage90
dc.identifier.wosWOS:000273327900003
dc.identifier.doi10.1007/s11129-009-9078-8
dc.subject.keywordsSegmentationen_US
dc.subject.keywordsCompetitionen_US
dc.subject.keywordsGame theoryen_US
dc.subject.keywordsPricingen_US
dc.subject.keywordsRebatesen_US
dc.subject.keywordsPrintersen_US
dc.identifier.scopusSCOPUS:2-s2.0-77951022043
dc.contributor.authorMale1
dc.relation.publicationcategoryArticle - International Refereed Journal - Institutional Academic Staff


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