Consumer poaching, brand switching, and price transparency

Christian Schultz

doi:10.1016/j.econlet.2014.02.024

Consumer poaching, brand switching, and price transparency

Christian Schultz

1 Citation (Scopus)

Abstract

This paper addresses price transparency on the consumer side in markets with behavioral price
discrimination which feature welfare reducing brand switching. When long-term contracts are not
available, an increase in transparency intensifies competition, lowers prices and profits, reduces brand
switching and benefits consumers and welfare. With long-term contracts, an increase in transparency
reduces the use of long-term contracts, leading to more brand switching and a welfare loss. Otherwise,
the results are the same as without long-term contracts.

Original language	English
Journal	Economics Letters
Volume	123
Pages (from-to)	266-269
Number of pages	4
ISSN	0165-1765
DOIs	https://doi.org/10.1016/j.econlet.2014.02.024
Publication status	Published - Jun 2014

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10.1016/j.econlet.2014.02.024

Cite this

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title = "Consumer poaching, brand switching, and price transparency",

abstract = "This paper addresses price transparency on the consumer side in markets with behavioral pricediscrimination which feature welfare reducing brand switching. When long-term contracts are notavailable, an increase in transparency intensifies competition, lowers prices and profits, reduces brandswitching and benefits consumers and welfare. With long-term contracts, an increase in transparencyreduces the use of long-term contracts, leading to more brand switching and a welfare loss. Otherwise,the results are the same as without long-term contracts.",

author = "Christian Schultz",

note = "JEL classification: L13, L41",

year = "2014",

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doi = "10.1016/j.econlet.2014.02.024",

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N2 - This paper addresses price transparency on the consumer side in markets with behavioral pricediscrimination which feature welfare reducing brand switching. When long-term contracts are notavailable, an increase in transparency intensifies competition, lowers prices and profits, reduces brandswitching and benefits consumers and welfare. With long-term contracts, an increase in transparencyreduces the use of long-term contracts, leading to more brand switching and a welfare loss. Otherwise,the results are the same as without long-term contracts.

AB - This paper addresses price transparency on the consumer side in markets with behavioral pricediscrimination which feature welfare reducing brand switching. When long-term contracts are notavailable, an increase in transparency intensifies competition, lowers prices and profits, reduces brandswitching and benefits consumers and welfare. With long-term contracts, an increase in transparencyreduces the use of long-term contracts, leading to more brand switching and a welfare loss. Otherwise,the results are the same as without long-term contracts.

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DO - 10.1016/j.econlet.2014.02.024

M3 - Journal article

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JO - Economics Letters

JF - Economics Letters

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