| Chapter 1: Reverse Price Discrimination and Information Discrimination with Bayesian Buyers: The Case of Monopoly The paper studies price discrimination under the situation where buyers' prior valuations are initially observable to a seller but the buyers receive further information about a product or service which remains private thereafter. The buyers interpret new information via Bayes' rule. We show that, in this environment, prices are not monotone in buyers' prior valuations. Interestingly, this results in the possibility that a seller intentionally offers a higher price to a low valuation buyer rather than a high valuation buyer (Reverse Price Discrimination), which sharply contrasts with the standard result of price discrimination. We further explore the seller's incentives to discriminate in provision of information.;Chapter 2: Reverse Price Discrimination with Competition: A Hotelling Duopoly We extend the previous analysis of Reverse Price Discrimination to a duopoly market using a standard Hotelling model. We show that the equilibrium prices can be non-monotone in the buyer's prior valuation even with competition. The buyers with relatively "weak" prior beliefs are charged higher prices, since they are more likely to view the products of two sellers vertically differentiated when receiving different signals from them, which mitigates sellers' price competition.;Chapter 3: Price Discrimination via Information Provision: Online vs. Offline Shoppers We study a new type of second-degree price discrimination where a different price is offered as a bundle with a different level of information about a product. We consider the situations where buyers are uncertain about the value of the product, and may update their expected valuation in a Bayesian way after observing a signal coming from the product while shopping at a store. When an online store provides less information on the product than an offline (brick-and-mortar) store, the seller's price discrimination induces high valuation buyers to shop at the online store and low valuation buyers at the offline store. Furthermore, the buyers' incentive compatibility constraints ensure that the price should be lower at online stores than at offline stores when both stores incur the same transportation (shopping) costs. The conditions under which it is more profitable for the seller to sell at both online and offline stores than to sell only at either of the stores are examined. We then explore the case in which buyers are sophisticated enough that they may "milk" the information from one store and use it at the other store (Information Arbitrage). It is also discussed that, in an ex post sense, the low valuation buyer's purchase is socially optimal, whereas the high valuation buyer's purchase is suboptimal due to excessive consumption. |
