Fox School of Business, Alter 517
1801 Liacouras Walk
Philadelphia, PA 19122
Institutional Affiliation: Temple University
NBER Working Papers and Publications
|March 2016||Competitive Price Targeting with Smartphone Coupons|
with , , : w22067
We conduct a large-scale field experiment to study competitive price discrimination in a duopoly market with two rival movie theaters. The firms use mobile targeting to offer different prices based on location and past consumer activity. A novel feature of our experiment is that we test a range of relative ticket prices from both firms to trace out their respective best-response functions and to assess equilibrium outcomes. We use our experimentally-generated data to estimate a demand model that can be used to predict the consumer choices and corresponding firm best-responses at price levels not included in the test. We find an empirically large return on investment when a single firm unilaterally targets its prices based on the geographic location or historical visit behavior of a mobile ...
Published: Jean-Pierre Dubé & Zheng Fang & Nathan Fong & Xueming Luo, 2017. "Competitive Price Targeting with Smartphone Coupons," Marketing Science, vol 36(6), pages 944-975.