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Price Discrimination in Online Retail

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  • Hindermann, Christoph Michael

Abstract

Although newspapers and online blogs provide a variety of anecdotal evidence for price discrimination, they are mostly not based on a scientific and systematic approach. This survey gives a short overview of scientific price discrimination studies in online retail. At first, it contains a short methodological part which shows how price discrimination can be detected. Thereafter, the results of different price discrimination studies are presented, showing that the prevalence of price discrimination varies across studies. Studies who analyze only ‘popular’ websites find a higher rate of prevalence than studies focusing also on ‘unpopular’ websites. As far as scientific evidence is available, online prices hinge on user-based, technical, and location-based features. The dispersion of the price seems to be largest when firms discriminate between users from different countries. Finally, potential reasons why price discrimination is not applied by all retailers are given.

Suggested Citation

  • Hindermann, Christoph Michael, 2018. "Price Discrimination in Online Retail," EconStor Preprints 181294, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:181294
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    File URL: https://www.econstor.eu/bitstream/10419/181294/1/__Persoanlized%20Prices%20in%20Online%20Retail_A%20Review_06_08_2018.pdf
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    References listed on IDEAS

    as
    1. Frederik Zuiderveen Borgesius & Joost Poort, 2017. "Erratum to: Online Price Discrimination and EU Data Privacy Law," Journal of Consumer Policy, Springer, vol. 40(4), pages 521-521, December.
    2. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    3. Alessandro Acquisti & Hal R. Varian, 2005. "Conditioning Prices on Purchase History," Marketing Science, INFORMS, vol. 24(3), pages 367-381, May.
    4. Haucap, Justus & Heimeshoff, Ulrich, 2017. "Ordnungspolitik in der digitalen Welt," DICE Ordnungspolitische Perspektiven 90, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    5. Frederik Zuiderveen Borgesius & Joost Poort, 2017. "Online Price Discrimination and EU Data Privacy Law," Journal of Consumer Policy, Springer, vol. 40(3), pages 347-366, September.
    6. Benjamin Reed Shiller, 2013. "First Degree Price Discrimination Using Big Data," Working Papers 58, Brandeis University, Department of Economics and International Business School, revised Jan 2014.
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    Citations

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    Cited by:

    1. Christian Niemeier & Richard Pospisil, 2021. "The Effects of User Tracking and Behavioral Management on Online Prices: A Theoretical Approach," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 386-398.
    2. Clavorà Braulin, Francesco, 2023. "The effects of personal information on competition: Consumer privacy and partial price discrimination," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    3. Clavorà Braulin, Francesco, 2021. "The effects of personal information on competition: Consumer privacy and partial price discrimination," ZEW Discussion Papers 21-007, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Price Discrimination; Online Retail; Price Differentiation; Pricing;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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