A Note on Consumer Flexibility, Data Quality - PDF document

A Note on Consumer Flexibility, Data Quality university reserved. ANoteonConsumerFlexibility,DataQualityandCollusionIrinaHasnasApril2014AbstractInthisnoteweanalyzethesustainabilityofcollusioninagameofrepeatedinteractionwhere…rmscanpricediscriminateamongconsumersbasedontwotypesofcustomerdata.ThisworkisrelatedtoLiuandSerfes(2007)andSapiandSuleymanova(2013).FollowingSapiandSuleymanovaweassumethatconsumersaredi¤erentiatedbothwithrespecttotheiraddressesandtransportationcostparameters(‡exibility).While…rmshaveperfectdataonconsumeraddresses,dataontheir‡exibilityisimperfect.Weusethreecollusiveschemestoanalyzetheimpactoftheimprovementinthequalityofcustomer‡exibilitydataontheincentivestocollude.IncontrasttoLiuandSerfesinourmodelitisthecustomer‡exibilitydatawhichisimperfectandnotthedataonconsumeraddresses.However,ourresultssupporttheir…ndingsthatwiththeimprovementindataqualityitismoredi¢culttosustaincollusion.JEL-Classi…cation:D43;L13;L15;O30.Keywords:PriceDiscrimination,CustomerData,Collusion. DüsseldorfInstituteforCompetitionEconomics(DICE),HeinrichHeineUniversityofDüsseldorf.E-mail:hasnas@dice.uni-duesseldorf.de.1 1IntroductionAdvancesininformationtechnologiesallow…rmstocollect,storeandanalyzevarioustypesofcustomerdataincludingdemographics(address,gender,age,income)anddataonpreviouspurchases.1Thisdatamaygiveinsightsintoconsumers’preferencesand‡exibility,allowing…rmstopricediscriminateamongthem.EversinceThisseandVives(1988)itisknownthatcompetitivepricediscriminationmayintensifycompetitionanddecrease…rms’pro…ts,asaresult…rmscouldcolludenottoacquirecustomerdataand/orsharethemarket.2;3Inthisnoteweanalyzehowincentivestocolludedependonthequalityofcustomerdata.FollowingSapiandSuleymanova(2013)weintroducetwo-dimensionalconsumerheterogeneityandassumethatconsumersareheterogeneousbothwithrespecttothebrandpreferencesandthestrengththereof.Respectively,twotypesofcustomerdataareavailableto…rms.Furthermore,weassumethatdataonconsumeraddressisperfectanddataontheir‡exibilityisnot.Forexample,inlocation-basedmarketing…rmsknowthepreciselocationofeachconsumer,whileconsumersensitivitytodi¤erentmarketingactivities(likepricereductionsandadvertising)canbeestimatedonlywithless-than-perfectaccuracy.4WefollowLiuandSerfes(2007)tomodelimperfectcustomerdata.Weassumethat…rmsareabletocorrectlyidentifydi¤erent‡exibilitysegmentsandcanallocateanyconsumertooneofthesegments.5Whenthequalityofcustomer‡exibilitydataimproves,consumersegmentationbecomes…ner.ThearticlesmostcloselyrelatedtothispaperareLiuandSerfes(2007)andSapiandSu- 1Forexample,IBMprovidesdataprocessingplatformsandBusinessanalyticssoftwarewhichhelp…rmstostore,process,forecastandstatisticallyanalyzevariousdata(http://www-01.ibm.com/software/data/bigdata/platform/product.html).2Intelecommunicationsmarket,…rmscollectlargeamountsofcustomerdatasuchasname,gender,physicaladdressandcallinghistory.In2005ConseildelaConcurrence…nedthreebiggestFrenchmobileoperatorsforengaginginanticompetitiveagreements.Thesecompanieswereaccusedofsharingcustomerdataandsharingthemarket.http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=160&id_article=5023Intheairlineindustry…rmscollectcustomerdatathroughFrequentFlyerProgram(FFP)anduseitforthirddegreepricediscrimination.Customerscanoptinandreceivediscountsbasedonthetotalamountofmilesthey‡y.In1999twoScandinavianairlinesSASandMaerskAirnoti…edtheEuropeanCommissionaboutacooperativeagreementthatincludedcode-sharingonanumberofroutesandFFPextensionthatallowedMaerskcustomerstoearnpointswhen‡yingwithSASandviceversa.However,in2001theEuropeanCommission…nedtheairlinesformarket-sharingagreement.(Sun-AirversusSASandMaerskAir,2001)4Epling(2002)usesdatafromlong-distancetelephonytoshowthatinformationoncustomer’slocationandincomeallows…rmstobetterprice-discriminateamongconsumers.5Angwin(2010)describeshowvariousinternetcompaniescollectpersonalinformation(location,age,gender,income,education,maritalstatus,etc.)aboutwebsites’usersandsellittomarketersandadvertisers.Thedatacanbeofanyquality:"Wecansegmentitallthewaydowntooneperson"saysEricPorres,Lotame’schiefexecutiveo¢cer.2 leymanova(2013).LiuandSerfesanalyze…rms’incentivestocolludedependingonthequalityofthedataonconsumerbrandpreferenceswhenconsumersaredi¤erentiatedonlyalongthatdimension.SapiandSuleymanovaanalyze…rms’incentivestoacquireimperfectcustomer‡exi-bilitydatawhendataonconsumeraddressesisperfectandboth…rmsholdit.Intheiranalysisconsumersaredi¤erentiatedalongtwodimensions:brandpreferencesandthestrengththereof.FollowingSapiandSuleymanova(2013)weintroduceconsumerheterogeneityintransportationcostparametersandanalyze…rms’incentivestocolludedependingonthequalityofdataonconsumer‡exibility.Thisnoteisorganizedasfollows.Section2presentsthemodel.InSection3weprovidetheequilibriumanalysisandanalyze…rms’incentivestocollude.Weconsiderthreecollusiveschemes:Inthe…rstscheme…rmscolludebothinpricesandtheirdataacquisitiondecisions;inthesecond,theycolludeonlyinprices;inthethird,theycompeteinpricesandcolludeindataacquisitiondecisions.Section4comparesthethreeschemes.WeconcludeinSection5.2TheModelTherearetwo…rms,AandB,eachsituatedattheendofaunitinterval.FirmAislocatedatxA=0,andFirmBatxB=1.Each…rmproducesabrandofthesamegood.Wenormalizethemarginalcostofproductionofsuchgoodtozero.Thereisamassofconsumersnormalizedtounity.WefollowSapiandSuleymanova(2013)andassumethatconsumersaredi¤erentiatedbothwithrespecttotheiraddressandtransportationcostparameters.Therefore,everyconsumerisuniquelydescribedbyapairofparameters(x;t),wherex2[0;1]representsconsumer’saddressandt2[t ; t]isher‡exibility,wheret 0and t�t .Weassumethatxandtareuniformlyandindependentlydistributed,;i.e.,ft=1=( t�t ),fx=1andft;x=1=( t�t ).Weassumethatboth…rmsholdperfectinformationonconsumerlocation.Firmscanalsoacquirecustomer‡exibility(transportationcosts)dataatzerocost.Dataonconsumertransportationcostsisimperfectandcharacterizedbytheexogenouslygivenqualityparameterk=0;1;2;:::;1.Foranyk…rmsareabletodividetheinterval[t ; t]inton:=2ksegmentsandallocateeachconsumertooneofthem.Everysegmentm=1;2;:::;2kcharacterizedbythetrans-portationcostparametertm2[t m; tm],wheret m=t +( t�t )(m�1)=nand tm=t +( t�t )m=n.Higherkimpliescustomerdataofa…nersegmentationoftheinterval[t ; t]and,hence,betterdataquality.Ifk!1,…rmshaveperfectinformationonconsumers’transportationcost.3 WefollowSapiandSuleymanova(2013)andconsidertwoversionsofthemodel,dependingonconsumerheterogeneityin‡exibilitymeasuredbytheratiol(t ; t):= t=t .Inthe…rstversionconsumersarerelativelyheterogeneousandt =0,suchthatlimt !0l(t ; t)=1.Inthesecondversionconsumersarerelativelyhomogeneous,suchthatt �0andl(t ; t)2.Ifa…rmacquires‡exibilitydata,itchargesdi¤erentpricesdependingonaconsumer’saddress,‡exibilitysegmentandthequalityofcustomerdata:pi(x;m;n)withi2fA;Bg.Therefore,twoconsumersatthesamelocationthatbelongtodi¤erent‡exibilitysegmentscanbechargeddi¤erentprices.Theutilityofaconsumer(x;t)incaseofbuyingfromFirmiisUi(pi(x;m;n);t;x)=V�tjx�xij�pi(x;m;n),whereV�0isthebasicvaluationofaproduct.Inordertoensurethatthemarketisalwayscoveredinequilibrium,weassumethatVislargeenough.Aconsumeralwaysbuysfroma…rmo¤eringthehighestutility.Theindi¤erentconsumerbuysfromthenearest…rm.Weconsideranin…nitelyrepeatedgame.Inastagegame…rmsdecidesimultaneouslyandindependentlywhethertoacquirecustomer‡exibilitydataandwhichpricestocharge.Thesedecisionsbecomeacommonknowledgeattheendofeachstagegameand…rmshaveaperfectmemoryofallpastactions.Firmsmaycolludeusingtriggerstrategies,suchthatinperiodta…rmplayscooperativelyifinperiodt�1therivalplayedcooperatively.Inotherwords,…rmssticktothecollusionagreementaslongasnobodyhasdeviated.However,ifdeviationtakesplaceinperiodt,…rmswillplayNashEquilibriumfromperiodt+1toin…nity.Wedenotetheone-shotcollusivepro…tofFirmibyCi(n),thedeviationpro…tbyDi(n),andnon-cooperativepro…tbyNi(n).Collusioncanonlybesustainedinthein…nitelyrepeatedgameifthediscountfactorissu¢cientlyhigh: (n)Di(n)�Ci(n) Di(n)�Ni(n),i2fA;Bg.3EquilibriumAnalysisNon-cooperativepro…ts.Notethatinourmodel…rmsmakedataacquisitiondecisionssimultaneouslywiththeirpricechoicesinastagegame,andtherefore,inthenon-cooperativeequilibrium…rmsalwaysacquirecustomerdata.Thisisdi¤erentfromSapiandSuleymanova4 (2013),wherethesetwodecisionsaremadesequentially.Hence,theequilibriumpricesinouranalysisaresameasinSapiandSuleymanovainthesubgamewhereboth…rmsacquirecustomerdata.Theinterval[0;1=2)representsFirmA’sturfandtheinterval(1=2;1]isFirmB’sturf.GivenpricespA(x;m;n)andpB(x;m;n),thetransportationcostparameteroftheindi¤erentconsumeronthesegmentmwithaddressxiset(x;m;n)=pA(x;m;n)�pB(x;m;n) 1�2x,whereet(x;m;n)2[t m; tm].Onanysegmentm,FirmAservesitsmostloyalconsumerswithhightransportationcostparameterstet(x;m;n),andFirmBservestheleastloyalconsumersofFirmAwithlowtransportationcostparameter,tet(x;m;n).Foranyaddressx2[0;1=2)andonanysegmentm,FirmAmaximizestheexpectedpro…tE[A(x;m;n)jx1=2]=pA(x;m;n)Prftet(x;m;n)g,whileFirmBmaximizestheexpectedpro…tE[B(x;m;n)jx1=2]=pB(x;m;n)Prftet(x;m;n)g.Inourversionofthemodel,theequilibriumpricesandpro…tsinthenon-cooperativecaseareidenticaltothosestatedinProposition1inSapiandSuleymanova(2013)anddependondataqualityandconsumerheterogeneityin‡exibility.Proposition1.(FromSapiandSuleymanova,2013)i)Assumethatconsumersarerelativelydi¤erentiated.InequilibriumonFirmi’sturfontheseg-mentm=1,…rmschargepricespi(x;1;n)=2 tj1�2xj=(3n)andpj(x;1;n)= tj1�2xj=(3n).Firmiservesconsumerswitht t=(3n).Onthesegments2mnequilibriumpricesarepi(x;m;n)= t(m�1)j1�2xj=nandpj(x;m;n)=0,whereFirmiservesallconsumers.Equilibriumpro…tsarei(n)=5 t=(36n2)+ t=8(1�1=n).ii)Assumethatconsumersarerelativelyhomogeneous.InequilibriumonFirmi’sturf…rmschargepricespi(x;m;n)=t +� t�t
(m�1)=nj1�2xjandpj(x;m;n)=0.Firmiservesallconsumersonitsturf.Firmsrealizepro…tsi(n)=t =4+( t�t )=8[1�1=n].Thefollowingtwographsshowhow…rms’non-cooperativepro…tschangewiththeimprove-5 mentinthequalityofcustomer‡exibilitydata.Weusethevaluest =1and t=2forthecasesofrelativelyhomogeneousandrelativelydi¤erentiatedconsumers,respectively. Figure1.Non-cooperativepro…twithrelativelydi¤erentiatedconsumers Figure2.Non-cooperativepro…twithrelativelyhomogeneousconsumersThetwoversionsofthemodel(withrelativelyhomogeneousanddi¤erentiatedconsumers)yieldtwodi¤erentequilibriawhicharedrivenbythetypeofthebest-responsefunctionofa…rmonitsturf.Precisely,asisshowninSapiandSuleymanova(2013)whenconsumersareheterogeneous(homogeneous)a…rmfollowsamarket-sharing(monopolizationstrategy)onitsturfintheabsenceofdataonconsumer‡exibility.Intheformercasea…rmoptimallyservesallconsumersonitsturfonlyiftherival’spriceissu¢cientlyhigh.Otherwise,a…rmsharesconsumersonitsturfwiththerival.Thereasonisthatitiscostlyfora…rmtoserveallconsumersonitsturf,becausethemost‡exibleconsumercanswitchbrandscostlessly.Inequilibriumthe6 rivalchargesindeedarelativelylowpriceandtargetstheleastloyalconsumersofa…rmsomeofwhomswitch.Asaresult,inequilibrium…rmsserveconsumersonbothturfs.Theacquisitionofdataofqualityk=1intensi…escompetitionasonbothnewsegmentstherivalchargeslowerprices.Asaresult,pro…tsdecrease.However,withafurtherimprovementindataqualitypro…tsstarttoincreasesincea…rmcanbettertargetconsumers,andtherent-extractione¤ectdominates.Whenconsumersarerelativelyhomogeneous,foranypriceoftherivalitsu¢cefora…rmtodecreasealittlethepricetargetedattheleast‡exibleconsumerstoattractallconsumerswithagivenaddress.Thismakesitoptimalfora…rmtofollowamonopolizationstrategyonitsturf,suchthatforanypriceoftherivala…rmoptimallyservesallconsumersonitsturf.Theninequilibriumtherivalchargesthepriceofzeroona…rm’sturfandcompetitionisveryintense.Astherivalcannotdecreaseitspricebelowzero,theacquisitionofadditionaldatagivesriseonlytotherent-extractione¤ect,anda…rm’spro…tsmonotonicallyincreaseindataquality.Inthecaseofrelativelydi¤erentiatedconsumersthebehaviorofnon-cooperativepro…tsdependingondataqualityissimilartotheoneinLiuandSerfes(2007),becauseinbothcasesthereisaconsumerwhocanswitchbrandscostlessly.Thisistheconsumerwithx=1=2inLiuandSerfes(2007)andtheconsumerwitht=0inourcase.Collusivepro…ts.Firmsmaycolludealongtwodimensions:customerdataacquisitionde-cisionsandpricingdecisions.WefollowLiuandSerfes(2007)andconsiderthreecollusiveschemes.Inthe…rstscheme…rmsacquirecustomer‡exibilitydataandchargemonopolydis-criminatoryprices.Each…rmactsasamonopolistonitsownturf.Providedthebasicvaluationishighenough,allconsumersareservedundercollusion,andeveryconsumerbuysfromhermostpreferred…rmataprice,whichmakesherindi¤erentbetweenbuyingatthat…rmandnotbuying.Thistypeofcollusionleadstoboth…rmsusingmonopolizationstrategiesregardlessofconsumers’heterogeneityin‡exibility.Ifa…rmdeviates,itgainsallconsumersontherival’sturf.Thefollowingpropositionstatesthecollusiveanddeviationpricesandpro…tsforthe…rstscheme.Proposition2.Considerthecollusiveschemeunderwhich…rmsacquirecustomer‡exibil-itydataandchargecollusiveprices.Assumethatthebasicutilityisrelativelylarge:V�maxt =2+( t�t )(m+1)=(2n);t +m+1 n( t�t ) foranym,n.i)Undercollusion,onitsownturfonthesegmentmandaddressx,Firmi=fA;Bgchargesthe7 pricepCi(x;m;n)=V��t +( t�t )m=n
jx�xijandservesallconsumersthere.Thecollusivepro…tofFirmiisCi(n)=V=2�t =8�( t�t )(1+n)=(16n).ii)IfFirmjdeviatesontheturfofFirmi,itchargesthepricepDj(x;m;n)=V��t +( t�t )m=n
jxj�xjandservesallconsumers.Thepriceonitsownturfdoesnotchange.Thedeviationpro…tofFirmjisDj(n)=V�t =2�( t�t )(1+n)=(4n).Proof.SeeAppendix.Wenowturntothesecondcollusivescheme.Underthisscheme,…rmscolludebydecidingnottoacquiredataonconsumer‡exibilityandchargemonopolypricesindependentlyofconsumer’s‡exibility.Thefollowingpropositionstatesthecollusiveanddeviationpricesandpro…tsforthesecondscheme.Proposition3.Considerthecollusiveschemeunderwhich…rmsdonotacquirecustomer‡exibilitydataandcolludeinprices.Assumethatthebasicutilityisrelativelylarge:V�max t�t =2;t +(m+1)=n( t�t ) foranymandn.i)Undercollusion,Firmi=fA;BgchargesthepricepCi(x)=V� tjx�xijtoconsumerswithaddressx.Thecollusivepro…tofFirmiisCi=V=2� t=8.ii)IfFirmideviates,itacquiresconsumer‡exibilitydata.OnitsownturfitchargesthepricepDi(x;m;n)=V��t +( t�t )m=n
jx�xij,andpDi(x;m;n)=V� tx��t +( t�t )m=n
j2x�xijontherival’sturf.Thedeviationpro…tofFirmiisDi(n)=V�( t+3t )=8�3( t�t )(1+n)=(16n).Proof.SeeAppendix.Whena…rmdeviatesunderthesecondcollusivescheme,itacquiresdataonconsumer‡exibilityanddiscriminatesconsumerswithrespecttotheiraddressand‡exibilityonbothturfs.Ifthebasicconsumervaluationishighenough,then…rmschargepricesunderwhichallconsumersbuybothundercollusionanddeviation.Firmsusemonopolizationstrategies.Thisimpliesthatundercollusioneach…rmservesallconsumersonitsownturfandnoneofthe…rmswantstotargetthemost‡exibleconsumersoftherival.However,ifa…rmdeviates,thenitservesallconsumersonbothturfs.TheresultsfromPropositions2and3donotdependonconsumers’heterogeneity.Underthesecollusiveschemes,both…rmsoptimallyshareandmonopolizethemarket.Theyextractthehighestpossiblerentfromconsumersandsetsuchcollusivepricesthateveryconsumerbuysfromitsnearest…rm.Underdeviation,a…rmundercutstherival’scollusivepriceandservesallconsumers.8 Finally,weconsiderthethirdcollusivescheme,where…rmsagreenottoacquirecustomer‡exibilitydataandsetcompetitiveprices.Thisschemedoesnotmakesensewithrelativelyhomogeneousconsumersasforanyqualityofcustomer‡exibilitydataityieldspro…tswhichare(weakly)smallerthanthenon-cooperativepro…ts.6Thereasonbeingthatinthenon-cooperativeequilibrium…rmsdiscriminateconsumersbasedontheiraddressand‡exibility.Sincethedataonconsumeraddressisperfect,thenon-cooperativepro…tdependsonthequalityofthecustomer‡exibilitydata:SapiandSuleymanova(2013)…ndthatthenon-cooperativepro…tsincreasemonotonicallyindataqualitywhenconsumersarerelativelyhomogeneous.When…rmsagreetonotacquirecustomer‡exibilitydataandcompeteinprices(collusiveschemethree),theydiscriminateconsumersbasedsolelyontheiraddress.Thereforewhenconsumersarerelativelyhomogeneous,thepro…tsinthethirdschemecorrespondtothelowestnon-cooperativepro…ts,i.e.whenthequalityofdataiszero.Hence,weconsiderthisschemeonlyforrelativelydi¤erentiatedconsumers.Thefollowingpropositionstatescollusiveanddeviationpro…tsunderthethirdscheme.Proposition4.Considerthecollusiveschemeunderwhich…rmsdonotacquirecustomer‡exibilitydataandcompeteinprices.i)Undercollusion,onFirmi’sturf…rmschargepricespCi(x)=2 tj1�2xj=3andpCj(x)= tj1�2xj=3,wherei=fA;Bgandi6=j.Firmiservesconsumerswitht t=3.Collusivepro…tsareCi=5 t=36.ii)IfFirmideviates,itacquirescustomer‡exibilitydata.Assumethatn�2(k�1).OnitsownturfFirmichargesthedeviationpricepDi(x;m;n)= t=3(3(m�1)=n+1)j1�2xj.Ontherival’sturfitchargesthepricepDi(x;m;n)= t=3(2�3m=n)j1�2xjtoallconsumersifm2n=3�1,andpDi(x;m;n)= t=6(2�3(m�1)=n)j1�2xjtoconsumerswith‡exibilityt2[t m; t=3+t m=2]ifm�2n=3�1.Thedeviationpro…tofFirmiisDi(n)=(5n�3) t 24n+[2n 3�1]Xm=1R1 2(1+xi)xi 2R tmt mft t 3(2�3m n)j1�2xjdtdx+nXm=[2n 3]R1 2(1+xi)xi 2R t(1 3+m�1 2n)t mft t 6(2�3m�1 n)j1�2xjdtdxAssumenowthatn=2(k=1).OnitsownturfFirmichargesthedeviationpricepDi(x;1;2)= 6Underthirdschemethecollusivepro…tincaseofrelativelyhomogeneousconsumersisCi=t 4.9 (5 t=12)j1�2xjift2[ t=12; t=2],andpDi(x;2;2)=(5 t=6)j1�2xjift2[ t=2; t].OnFirmj’sturfFirmichargespDi(x;1;2)=( t=3)j1�2xjift2[0; t=3],andpDi(x;2;2)=( t=12)j1�2xjift2[ t=2;7 t=12].Thedeviationpro…tofFirmiisDi=(17 t)=96.Proof.SeeAppendix.When…rmscolludeunderthisschemeandconsumersarerelativelydi¤erentiated,every…rmfollowsamarket-sharingstrategyonitsturfandlosesthelessloyalconsumerstotherival.Thereasonisthatthistypeofcollusiondoesnotallowforpricediscriminationwithrespecttoconsumer‡exibility,…rmsmustsetuniformpricestoconsumerswiththesameaddress.Withrelativelydi¤erentiatedconsumers,itisoptimalfora…rmtochargearelativelyhighpriceandtargetthemostloyalconsumersonitsturf.Asaresult,underthiscollusiveschemeeach…rmservesconsumersonbothturfs.Ifa…rmdeviates,itacquirescustomer‡exibilitydataofquality:n2.7Whenn=2,itadoptsadi¤erentdeviationstrategythanwhenn�2.Let’sconsidertheoptimaldeviationstrategyonFirmi’sownturf.Ifn=2,Firmifollowsamarket-sharingstrategyonthe…rstsegmentandamonopolizationstrategyonthesecond.However,ifn�2,itfollowsamonopolizationstrategyonallsegments.Nowweturntotheoptimaldeviationstrategyonarival’sturf.Ifn=2,Firmiadoptsamarket-sharingstrategyonbothsegments.However,ifn�2,itfollowsalsoamonopolizationstrategyonsomesegmentsaccordingtotheruledescribedinProposition4.Theseresultsaredrivenbythefactthatconsumersarerelativelydi¤erentiated.Whenthedeviationtakesplaceona…rm’sownturf,thenegativecompetitione¤ectisverystrongwhenn=2,andbecomesweakerwhennincreases.Whena…rmdeviatesontherival’sturf,thecompetitione¤ectthereisevenstronger,therefore,evenwithadataofbetterqualitythedeviating…rmstilltargetsonlythemost‡exibleconsumersoftherival.Hence,whena…rmdeviatesunderthethirdscheme,itdoesnotserveallconsumersinthemarket. 7Whenn=1,itstandsfornodataacquisitionorcustomerdataofzeroquality,thereforewedonotconsiderthiscase.10 4ComparisonofthecollusiveschemesAssumption1.Basicvaluationisassumedtobesu¢cientlyhigh,preciselyV�2 t.8Tocomparethethreecollusiveschemes,wedistinguishbetweentwocasesbasedonconsumerheterogeneity.Consider…rstthecaseofrelativelyhomogeneousconsumers.Collusiveschemeonecanbesustainedifthediscountfactorisrelativelyhigh: 1(n):=V 2�3t 8�( t�t ) 16(3+3 n) V�3t 4� t�t 8(3+1 n).The…rstorderderivativeof 1(n)withrespecttonispositiveunderAssumption1.As 1(n)isanincreasingfunctionofn,itimpliesthatcollusionbecomesmoredi¢culttosustainasthequalityofcustomer‡exibilitydataimproves.Thesecondcollusiveschemecanbesustainedif 2(n),where 2(n):=V 2�3t 8�( t�t ) 16(3+3 n) V� t+5t 8�( t�t )(5n+1 16n).InFigure3wepresent 2(n)asafunctionofn=1;:::;2k.9 Figure3. 2(n)incaseofrelativelyhomogeneousconsumers. 8Assumption1representsthestrictestconditiononVfromPropositions2and3anditisobtainedwhenn=1andt =0.9InFigures3and4weusethefollowingvalues:V=6, t=2andt =1(inthecaseofrelativelyhomogeneousconsumers).11 Again,the…rst-orderderivativeof 2(n)withrespecttonispositive.Similarlytothe…rstcollusivescheme,itbecomesmoredi¢culttosustaincollusionwhenthequalityofcustomer‡exibilitydataimproves.Moreover,itiseasiertosustainthe…rstcollusivescheme: 1(n) 2(n)foranyn2.10LiuandSerfes(2007)alsogetthelatterresultinamodelwheredataonconsumeraddressesisimperfect.Wenowturntothecaseofrelativelydi¤erentiatedconsumers,where 1(n):=V 2�3 t(1+n) 16n V�5 t 36n2� t(3n+1) 8n 2(n):=V 2�3 t(1+n) 16n V�5 t 36n2� t 8� t(5n+1) 16nFirst-orderderivativesof 1(n)and 2(n)withrespecttonarepositive.InFigure4wepresent 2(n)incaseofrelativelydi¤erentiatedconsumers.11 Figure4. 2(n)incaseofrelativelydi¤erentiatedconsumers.Inthethirdcollusivescheme, 3(n)cannotbederivedanalytically.Weestimate 3(n)fordi¤erentvaluesoftheinitialparametersinthemodel.Ourresultsshowthat 3(n)isanincreasingfunctionofn.12Ourresultssupportthe…ndingsofLiuandSerfes(2007)thatitbecomesmoredi¢culttosustaincollusionwhenthequalityofcustomerdataimproves.Weconcludethattheabove 10Ifn=1then 1(n)= 2(n).11Wedonotshowthegraphicsfor 1(n),becausetheyareanalogoustothosealreadypresentedfor 2(n).12Forexample,for t=10,weget 3(2)=0:477; 3(4)=0:679; 3(8)=0:790; 3(16)=0:856.12 resultholdsnotonlywhenthequalityofdataonconsumeraddressesimproves,butalsowhenthequalityofdataonconsumer‡exibilityimprovesand…rmsholdperfectdataonconsumerlocations.Thisresultholdsbothwhenconsumersarerelativelyhomogeneousandrelativelydi¤erentiatedin‡exibility,althoughthebehaviorofnon-cooperativepro…tsisdi¤erentinthetwocases.Theintuitionforthisresultisthefollowing:Asnon-cooperativepro…tsincreasewiththeimprovementindataqualitywhenconsumersarerelativelyhomogeneous,thepunishmentfollowingdeviationbecomeslessseverewithbetterdataquality,whichmakesdeviationmoreattractive.5ConclusionWeanalyzethesustainabilityofcollusioninanin…nitelyrepeatedgamedependingonthequalityofcustomer‡exibilitydata.WefollowSapiandSuleymanova(2013)andassumethatconsumersaredi¤erentiatedbothwithrespecttotheiraddressand‡exibility.Therefore,…rmscanprice-discriminateamongconsumersusingtwotypesofcustomerdata:consumeraddressand‡exibility.Weassumethatdataonconsumeraddressisperfect,whiledataonconsumer‡exibilityisnot.InthiswaywedepartfromLiuandSerfes(2007)whoassumethatconsumersaredi¤erentiatedonlyintheiraddressesandthisdataisimperfect.Weconsidertwocaseswithrespecttoconsumerheterogeneityin‡exibility:relativelydi¤erentiatedconsumersandrelativelyhomogeneousconsumers.Intheformercasethebehaviorofnon-cooperativepro…tsasafunctionofdataqualityissimilartothebehaviorofnon-cooperativepro…tsinLiuandSerfes:Thepro…ts…rstdecreaseandthenincrease.Whenconsumersarerelativelyhomogeneous,thenon-cooperativepro…tsincreasemonotonicallywiththeimprovementindataquality,whichmakesitmoredi¢culttosustaincollusionwiththeimprovementinqualityofcustomerdatacomparedtothecaseofrelativelydi¤erentiatedconsumers.Ourresultssupportthe…ndingsofLiuandSerfesthatcollusionbecomesmoredi¢culttosustainwiththeimprovementindataqualityalthoughweconsideradi¤erenttypeofcustomerdata:dataonconsumer‡exibility.13 AppendixProofProposition2.Wecharacterizethecollusiveoutcomeunderthe…rstcollusivescheme.Undercollusionevery…rmactsasamonopolistonitsownturf.Ifthebasicconsumervaluationishighenough,thenevery…rmservesallconsumersonitsturf.Thetransportationcostparameteroftheconsumeronthesegmentmindi¤erentbetweenbuyingfromFirmAandnotbuyingisV�tmx�pCA(x;m;n)=0=)etm=V�pCA(x;m;n) x,whereetm2[t m; tm].pCA(x;m;n)isthecollusivepricesetbyFirmAforaconsumeronsegmentmwithaddressx,giventhequalityofdataiskandtherearen:=2ksegments.FirmAservesconsumerswithtetmforanyaddressx1=2.ThereasonisthatineachsegmentconsumerswithrelativelylowtransportationcostparametersgetpositiveutilitywhenFirmAchargesthecollusiveprice,pCA(x;m;n).Asamonopolist,FirmAcanextractahigherrentfromthem.Consumerswithhightransportationcost,t&#x]TJ/;༕ ;.9; T; 21;&#x.679;&#x 0 T; [00;etm,choosetonotbuyatall,otherwisetheygetanegativeutility.Theexpectedpro…tisE[CA(x;m;n)jx1=2]=pCA(x;m;n)Prftetmg=pCA(x;m;n)ftV�pCA(x;m;n) x�t m.SolvingthemaximizationproblemofFirmAw.r.t.pCA(x;m;n)yieldstheconditiononV,whichguaranteesthatFirmAservesallconsumersforanyx1=2onanysegmentm:ifV&#x]TJ/;༕ ;.9; T; 20;&#x.78 ;� Td;&#x[000;t x+x n( t�t )(m+1)thenpCA(x;m;n)=V�t +( t�t )m nxandetm= tm.Thestrongestconditionimpliesx=1=2,yieldingV�t =2+( t�t )(m+1)=(2n).Thecollusivepro…tofFirmAisCA=nXm=1R1=20R tmt mftpCA(x;m;n)dtdx=V 2�t 8�( t�t )(1+n) 16n.Sincetwo…rmsaresymmetric,CB=CA.Wenowcharacterizetheoptimaldeviationstrategy.Ifa…rmdeviates,itchargesadi¤erentpriceonlyontherival’sturf.ConsideradeviationbyFirmB.Theindi¤erentconsumerontheturfofFirmAischaracterizedbytheequation14 V�tx�pCA(x;m;n)=V�(1�x)t�pDB(x;m;n),wherepDB(x;m;n)isthedeviationpriceofFirmBonFirmA’sturf.Theconsumerindi¤erentbetweenbuyingfromFirmAchargingthecollusivepriceandFirmBchargingthedeviationpriceisbtm=V�pDB(x;m;n)� tmx 1�2x,wherebtm2[t m; tm]andx1=2.FirmBservesconsumerswithtbtmforanyaddressx1=2.ThereasonisthatunderdeviationFirmBo¤ersalowerpricethantherivalandthemost‡exibleconsumers…nditattractivetoswitchsincetheyhavealowtransportationcost.Theexpecteddeviationpro…tofFirmBisE[DB(x;m;n)jx1=2]=pDB(x;m;n)Prftbtmg.SolvingthemaximizationproblemofFirmBwegetthefollowingcondition,whichguaranteesthatFirmBservesallconsumersonFirmA’sturf:ifV&#x]TJ/;༕ ;.9; T; 20;&#x.781;&#x 0 T; [00;t (1�x)+( t�t ) n(m(1�x)+1�2x),thenpDB(x;m;n)=V�t +( t�t )m n(1�x)andbtm= tm.Thestrongestconditionimpliesx=0,yieldingV�t +( t�t )(m+1)=n.Thedeviationpro…tofFirmBisDB=nXm=1hR1=20R tmt mftpDB(x;m;n)dtdxi+CB(x�1=2)=V�t 2�( t�t )(1+n) 4n.Q.E.D.ProofProposition3.We…rstcharacterizethecollusiveoutcomeunderthesecondcollusivescheme.Every…rmactsasamonopolistonitsturfandchargesamonopolypriceforanyaddressonitsturfwhichdoesnotdependonthesegment.ConsidertheturfofFirmA.Forsomex1=2thetransportationcostparameteroftheconsumerindi¤erentbetweenbuyingatFirmAandnotbuyingisV�tx�pCA(x)=0=)et=V�pCA(x) x,whereet2[t ; t].15 FirmAservesconsumerswithtet,becauseonlyconsumerswithrelativelylowtransportationcostsgetpositiveutilitywhenFirmAchargesthecollusiveprice,pCA(x).Itsexpectedpro…tisE[CA(x)jx1=2]=pCA(x)Prftetg=pCA(x)ftV�pCA(x) x�t .WesolvethemaximizationproblemofFirmAw.r.t.pCA(x).Ifthebasicconsumervaluationislargeenough,FirmAservesallconsumersonanysegmentonitsturf:ifV�(2 t�t )x,thenpCA(x)=V� txandet= t.Thestrongestconditionimpliesx=1=2,yieldingV� t�t 2.Thecollusivepro…tofFirmAisCA=R1=20R tt ftpCA(x)dtdx=V 2�t 8.Sincetwo…rmsaresymmetric,CB=CA.Every…rmdeviatesthroughacquiringcustomer‡exibilitydataofqualitykanddiscriminatesamong‡exibilitysegmentsonbothturfs.ConsiderthedeviationbyFirmB.Theconsumerindi¤erentbetweenbuyingfromFirmAorFirmBwithsomex1=2onsegmentmisgivenbytheequationV�tx�pCA(x)=V�(1�x)t�pDB(x;m;n),wherepDB(x;m;n)isthedeviationpriceofFirmBonFirmA’sturf.PlugginginpCA(x)intotheaboveequationyieldsbtm=V�pDB(x;m;n)� tx 1�2x,wherebtm2[t m; tm].FirmBservesconsumerswithtbtm,becausetheirutilityishigherwhentheybuyfromFirmBthanfromFirmA.Theexpecteddeviationpro…tofFirmBisE[DB(x;m;n)jx1=2]=pDB(x;m;n)Prftbtmg.WesolvethemaximizationproblemofFirmBw.r.t.pDB(x;m;n)andgetthatifthebasicconsumervaluationislargeenough,thenFirmBservesallconsumersfor16 somex1=2andsomem:ifV&#x]TJ/;༕ ;.9; T; 20;&#x.78 ;� Td;&#x[000; tx+(t +( t�t )m+1 n)(1�2x),thenpDB(x;m;n)=V� tx�t +( t�t )m n(1�2x)andbtm= tm.Thestrongestconditionimpliesx=0,yieldingV�t +( t�t )(m+1)=n.WenowcomputethedeviationpricesofFirmBonitownturf.Theindi¤erentconsumeronthesegmentmforsomex�1=2ischaracterizedbytheequation:V�t(1�x)�pDB(x;m;n)=0.Thetransportationcostparameteroftheconsumeronthesegmentmindi¤erentbetweenbuyingfromFirmBandnotbuyingisbtm=V�pDB(x;m;n) 1�x,wherebtm2[t m; tm].FirmBstaysamonopolistandservesconsumerswithtbtm.Theexpecteddeviationpro…tofFirmBonitsownturfisE[DB(x;m;n)jx�1=2]=pDB(x;m;n)Prftbtmg.Wesolvethemaximizationproblemw.r.t.pDB(x;m;n)andgetthatifthebasicconsumervaluationislargeenough,thenFirmBservesallconsumersonsomesegmentmandsomeaddressx�1=2:ifV�t +( t�t )m+1 n(1�x),thenpDB(x;m;n)=V�t +( t�t )m n(1�x).Thestrongestconditionimpliesx=1=2,yieldingV�t =2+( t�t )(m+1)=(2n).Thedeviationpro…tofFirmBisDB=nXm=1R1=20R tmt mftpDB(x;m;n)dtdx+nXm=1R11=2R tmt mftpDB(x;m;n)dtdx=V� t+3t 8�3( t�t )(1+n) 16n.Q.E.D.ProofProposition4.Underthethirdcollusivescheme…rmsagreenottoacquire‡exibilitydataandchargeuniformcompetitiveprices.Weconsiderthecaseofourmodelwithrelativelydi¤erentiatedconsumers.Collusivepricesandpro…tsareaspecialcaseofnon-cooperativeequilibrium,withk=0.Intheequilibriumboth…rmsfollowamarket-sharingstrategy,where17 FirmAsetsthepricepCA(xjx1=2)=2 t(1�2x)=3onitsownturfandservesconsumerswitht2[ t=3; t].Ontherival’sturfitchargespCA(xjx�1=2)= t(2x�1)=3,andservesconsumerswitht2[0; t=3].FirmBchargessymmetricprices.Thecollusivepro…tisCi=5 t=36,i=fA;Bg.Now,weturntothedeviationpricesandpro…ts.SupposethatFirmBdeviatesonA’sturfbyacquiringcustomerdata(n2)andchargingdiscriminatoryprices.Forx1=2,theconsumerindi¤erentbetweenbuyingfromFirmAorfromFirmBisgivenbythecondition:V�tx�pCA(xjx1=2)=V�(1�x)t�pDB(x;m;n)wherepDB(x;m;n)isthedeviationpriceofFirmBonFirmA’sturf.PluggingpCA(xjx1=2)=2 t(1�2x)=3intotheaboveequationweobtainthetransportationcostparameteroftheindi¤erentconsumer:btm=2 t(1�2x)�3pDB(x;m;n) 3(1�2x),wherebtm2[t m; tm].Ontherival’sturfFirmBservesconsumerswithrelativelylowtransportationcost,tbtm.Sinceconsumersarerelativelydi¤erentiated,therearealwaysconsumerswhocanswitchbrandscostlessly.ThereforeFirmBtargetsonlythemost‡exibleconsumersoftherival.Theexpecteddeviationpro…tofFirmBisE[DB(x;m;n)jx1=2]=pDB(x;m;n)Prftbtmg.WesolvethemaximizationproblemofFirmBw.r.t.pDB(x;m;n)takingintoaccountthatbtm2[t m; tm].Weobtainthefollowingresults:i)Ifm2n=3�1,thenpDB(x;m;n)=( t=3)(2�3m=n)(1�2x),each…rmfollowsamonopo-lizationstrategyonsegmentmandservesallconsumersthere.ii)Ifm�2n=3�1,thenpDB(x;m;n)=( t=6)(2�3(m�1)=n)(1�2x),FirmBfollowsamarket-sharingstrategyonthesegmentmandservesonlyconsumerswitht2[t m; t=3+t m=2].FirmBoptimallydeviatesonitsownturfaswell.Forx�1=2thetransportationcostparameteroftheindi¤erentconsumerisderivedfromthefollowingcondition:V�tx�pCA(xjx�1=2)=V�(1�x)t�pDB(x;m;n)wherepDB(x;m;n)isthedeviationpriceofFirmBonitsownturf.PluggingpCA(xjx�1=2)=18 t(2x�1)=3intotheaboveequationweobtain:btm=3pDB(x;m;n)� t(2x�1) 3(2x�1),wherebtm2[t m; tm].OnitsownturfFirmBservesconsumerswithrelativelyhightransportationcost,tbtm.Sinceconsumersarerelativelydi¤erentiated,itpreferstolosethemost‡exibleconsumerstotherivalbecauseservingthemisnotpro…table.Theexpecteddeviationpro…tofFirmBisE[DB(x;m;n)jx�1=2]=pDB(x;m;n)Prftbtmg.WesolvethemaximizationproblemofFirmBw.r.t.pDB(x;m;n)takingintoaccountthatbtm2[t m; tm]andgetthat:i)Ifm2�n=3,thenpDB(x;m;n)=( t=6)(3m=n+1)(2x�1),FirmBfollowsamarket-sharingstrategyonthesegmentmandservesonlyconsumerswitht2[ tm=2� t=6; tm].ii)Ifm�2�n=3,thenpDB(x;m;n)=( t=3)(2x�1)(3(m�1)=n+1)andFirmBfollowsamonopolizationstrategyonthesegmentm.Whenn=2(k=1)FirmBadoptsadi¤erentdeviationstrategy.Sinceconsumersarerelativelydi¤erentiated,itpreferstolosethemost‡exibleconsumers,whosetransportationcostparameterist2[0; t=12],toFirmA.Hence,ifm=1,FirmBadoptsamarket-sharingstrategyandchargesthepricepDB(x;1;2)=(5 t=12)(2x�1)toconsumerswitht2[ t=12; t=2].Ifm=2,FirmBadoptsamonopolizationstrategyandchargesthepricepDB(x;2;2)=(5 t=6)(2x�1)toconsumerswitht2[ t=2; t].Thetotaldeviationpro…t,whenn=2(k=1),isDB=R1=20R t=30ftpDB(x;1;2)dtdx+R1=20R7 t=12 t=2ftpDB(x;2;2)dtdx+R11=2R t=2 t=12ftpDB(x;1;2)dtdx+R11=2R t t=2ftpDB(x;2;2)dtdx=17 t 96Ifn4(k2),thenFirmBfollowsamonopolizationstrategyoneverysegmentonitsownturf.Thus,thetotaldeviationpro…tisDB=[2n 3�1]Xm=1R1=20R tmt mft t 3(2�3m n)(1�2x)dtdx+nXm=[2n 3]R1=20R t(1 3+m�1 2n)t mft t 6(2�3m�1 n)(1�2x)dtdx+nXm=1R11=2R tmt mft t 3(3m�1 n+1)(2x�1)dtdxQ.E.D.19 References1.Angwin,J.(2010).TheWeb’sNewGoldenMine:YourSecrets.TheWallStreetJournal,July30,2010.http://online.wsj.com/news/articles/SB100014240527487039409045753950735129894042.AnticompetitiveAgreementsintheMobileTelephonyMarket.AutoritédelaConcurrence,December1,2005.http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=160&id_article=5023.Epling,N.(2002).PriceDiscriminationamidHeterogeneousSwitchingCosts:ACompet-itiveTacticoftheTelephonyResaleFringe.YaleUniversity,Mimeo.4.IBM:http://www-01.ibm.com/software/data/bigdata/platform/product.html5.Liu,Q.,Serfes,K.(2007).MarketSegmentationandCollusionBehavior.InternationalJournalofIndustrialOrganization,pp.355-378.6.Sapi,G.,Suleymanova,I.(2013).ConsumerFlexibility,DataQualityandTargetedPric-ing,Mimeo.7.Sun-AirversusSASandMaerskAir.Commissiondecision2001/716/EC[2001]OJL265/15,CaseCOMP/D.237.444(O¢cialJournaloftheEuropeanCommunities,2001)8.Thisse,J.-F.,VivesX.(1988).OntheStrategicChoiceofSpatialPricePolicy.AmericanEconomicReview,pp.122-137.20 140 Hasnas, Irina, A Note on Consumer Flexibility, Data Quality and Collusion, April 2014. 139 Baye, Irina and Hasnas, Irina, Consumer Flexibility, Data Quality and Location Choice, April 2014. 138 Aghadadashli, Hamid and Wey, Christian, Multi-Union Bargaining: Tariff Plurality and Tariff Competition, April 2014. 137 Duso, Tomaso, Herr, Annika and Suppliet, Moritz, The Welfare Impact of Parallel Imports: A Structural Approach Applied to the German Market for Oral Anti-diabetics, April 2014. 136 Haucap, Justus and Müller, Andrea, Why are Economists so Different? 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Published in: Economic Modelling, 36 (2014), pp. 79-87.110 Baumann, Florian and Friehe, Tim, Competitive Pressure and Corporate Crime, September 2013. 109 Böckers, Veit, Haucap, Justus and Heimeshoff, Ulrich, Benefits of an Integrated 108 Normann, Hans-Theo and Tan, Elaine S., Effects of Different Cartel Policies: Evidence from the German Power-Cable Industry, September 2013. Forthcoming in: Industrial and Corporate Change. 107 Haucap, Justus, Heimeshoff, Ulrich, Klein, Gordon J., Rickert, Dennis and Wey, Christian, Bargaining Power in Manufacturer-Retailer Relationships, September 2013. 106 Baumann, Florian and Friehe, Tim, Design Standards and Technology Adoption: Welfare Effects of Increasing Environmental Fines when the Number of Firms is 105 Jeitschko, Thomas D., NYSE Changing Hands: Antitrust and Attempted Acquisitions of an Erstwhile Monopoly, August 2013. 104 Böckers, Veit, Giessing, Leonie and Rösch, Jürgen, The Green Game Changer: An Empirical Assessment of the Effects of Wind and Solar Power on the Merit Order, 103 Haucap, Justus and Muck, Johannes, What Drives the Relevance and Reputation of Economics Journals? An Update from a Survey among Economists, August 2013. 102 Jovanovic, Dragan and Wey, Christian, Passive Partial Ownership, Sneaky Takeovers, and Merger Control, August 2013. 101 Haucap, Justus, Heimeshoff, Ulrich, Klein, Gordon J., Rickert, Dennis and Wey, Christian, Inter-Format Competition Among Retailers – The Role of Private Label Products in Market Delineation, August 2013. 100 Normann, Hans-Theo, Requate, Till and Waichman, Israel, Do Short-Term Laboratory Experiments Provide Valid Descriptions of Long-Term Economic Interactions? A Study of Cournot Markets, July 2013. Forthcoming in: Experimental Economics. 99 Dertwinkel-Kalt, Markus, Haucap, Justus and Wey, Christian, Input Price Discrimination (Bans), Entry and Welfare, June 2013. 98 Aguzzoni, Luca, Argentesi, Elena, Ciari, Lorenzo, Duso, Tomaso and Tognoni, Massimo, Ex-post Merger Evaluation in the UK Retail Market for Books, June 2013. 97 Caprice, Stéphane and von Schlippenbach, Vanessa, One-Stop Shopping as a Cause of Slotting Fees: A Rent-Shifting Mechanism, May 2012. Published in: Journal of Economics and Management Strategy, 22 (2013), pp. 468-487. 96 Wenzel, Tobias, Independent Service Operators in ATM Markets, June 2013. Published in: Scottish Journal of Political Economy, 61 (2014), pp. 26-47. 95 Coublucq, Daniel, Econometric Analysis of Productivity with Measurement Error: Empirical Application to the US Railroad Industry, June 2013. 94 Coublucq, Daniel, Demand Estimation with Selection Bias: A Dynamic Game Approach with an Application to the US Railroad Industry, June 2013. 93 Baumann, Florian and Friehe, Tim, Status Concerns as a Motive for Crime?, April 2013. 92 Jeitschko, Thomas D. and Zhang, Nanyun, Adverse Effects of Patent Pooling on Product Development and Commercialization, April 2013. Published in: The B. E. Journal of Theoretical Economics, 14 (1) (2014), Art. No. 2013-0038. 91 Baumann, Florian and Friehe, Tim, Private Protection Against Crime when Property Value is Private Information, April 2013. Published in: International Review of Law and Economics, 35 (2013), pp. 73-79. 90 Baumann, Florian and Friehe, Tim, Cheap Talk About the Detection Probability, April 2013. Published in: International Game Theory Review, 15 (2013), Art. No. 1350003.89 Pagel, Beatrice and Wey, Christian, How to Counter Union Power? Equilibrium Mergers in International Oligopoly, April 2013. 88 Jovanovic, Dragan, Mergers, Managerial Incentives, and Efficiencies, April 2014 (First Version April 2013). 87 Heimeshoff, Ulrich and Klein Gordon J., Bargaining Power and Local Heroes, 86 Bertschek, Irene, Cerquera, Daniel and Klein, Gordon J., More Bits – More Bucks? Measuring the Impact of Broadband Internet on Firm Performance, February 2013. Published in: Information Economics and Policy, 25 (2013), pp. 190-203.85 Rasch, Alexander and Wenzel, Tobias, Piracy in a Two-Sided Software Market, Published in: Journal of Economic Behavior & Organization, 88 (2013), pp. 78-89.84 Bataille, Marc and Steinmetz, Alexander, Intermodal Competition on Some Routes in Transportation Networks: The Case of Inter Urban Buses and Railways, 83 Haucap, Justus and Heimeshoff, Ulrich, Google, Facebook, Amazon, eBay: Is the Internet Driving Competition or Market Monopolization?, January 2013. Published in: International Economics and Economic Policy, 11 (2014), pp. 49-61. 82 Regner, Tobias and Riener, Gerhard, Voluntary Payments, Privacy and Social Pressure on the Internet: A Natural Field Experiment, December 2012. 81 Dertwinkel-Kalt, Markus and Wey, Christian, The Effects of Remedies on Merger 80 Baumann, Florian and Friehe, Tim, Optimal Damages Multipliers in Oligopolistic 79 Duso, Tomaso, Röller, Lars-Hendrik and Seldeslachts, Jo, Collusion through Joint R&D: An Empirical Assessment, December 2012. Forthcoming in: The Review of Economics and Statistics. 78 Baumann, Florian and Heine, Klaus, Innovation, Tort Law, and Competition, December 2012. Published in: Journal of Institutional and Theoretical Economics, 169 (2013), pp. 703-719.77 Coenen, Michael and Jovanovic, Dragan, Investment Behavior in a Constrained Dictator Game, November 2012. 76 Gu, Yiquan and Wenzel, Tobias, Strategic Obfuscation and Consumer Protection Policy in Financial Markets: Theory and Experimental Evidence, November 2012. Forthcoming in: Journal of Industrial Economics under the title “Strategic Obfuscation and Consumer Protection Policy”. 75 Haucap, Justus, Heimeshoff, Ulrich and Jovanovic, Dragan, Competition in Germany’s Minute Reserve Power Market: An Econometric Analysis, November 2012. Published in: The Energy Journal, 35 (2014), pp. 139-158. 74 Normann, Hans-Theo, Rösch, Jürgen and Schultz, Luis Manuel, Do Buyer Groups Facilitate Collusion?, November 2012. 73 Riener, Gerhard and Wiederhold, Simon, Heterogeneous Treatment Effects in Groups, November 2012. 72 Berlemann, Michael and Haucap, Justus, Which Factors Drive the Decision to Boycott and Opt Out of Research Rankings? A Note, November 2012. 71 Muck, Johannes and Heimeshoff, Ulrich, First Mover Advantages in Mobile Telecommunications: Evidence from OECD Countries, October 2012. 70 Karaçuka, Mehmet, Çatik, A. Nazif and Haucap, Justus, Consumer Choice and Local Network Effects in Mobile Telecommunications in Turkey, October 2012. Published in: Telecommunications Policy, 37 (2013), pp. 334-344. 69 Clemens, Georg and Rau, Holger A., Rebels without a Clue? Experimental Evidence on Partial Cartels, April 2013 (First Version October 2012). 68 Regner, Tobias and Riener, Gerhard, Motivational Cherry Picking, September 2012. 67 Fonseca, Miguel A. and Normann, Hans-Theo, Excess Capacity and Pricing in Bertrand-Edgeworth Markets: Experimental Evidence, September 2012. Published in: Journal of Institutional and Theoretical Economics, 169 (2013), pp. 199-228. 66 Riener, Gerhard and Wiederhold, Simon, Team Building and Hidden Costs of Control, September 2012. 65 Fonseca, Miguel A. and Normann, Hans-Theo, Explicit vs. Tacit Collusion – The Impact of Communication in Oligopoly Experiments, August 2012. Published in: European Economic Review, 56 (2012), pp. 1759-1772. 64 Jovanovic, Dragan and Wey, Christian, An Equilibrium Analysis of Efficiency Gains from Mergers, July 2012. 63 Dewenter, Ralf, Jaschinski, Thomas and Kuchinke, Björn A., Hospital Market Concentration and Discrimination of Patients, July 2012 . Published in: Schmollers Jahrbuch, 133 (2013), pp. 345-374. 62 Von Schlippenbach, Vanessa and Teichmann, Isabel, The Strategic Use of Private Quality Standards in Food Supply Chains, May 2012. Published in: American Journal of Agricultural Economics, 94 (2012), pp. 1189-1201. 61 Sapi, Geza, Bargaining, Vertical Mergers and Entry, July 2012. 60 Jentzsch, Nicola, Sapi, Geza and Suleymanova, Irina, Targeted Pricing and Customer Data Sharing Among Rivals, July 2012. Published in: International Journal of Industrial Organization, 31 (2013), pp. 131-144.59 Lambarraa, Fatima and Riener, Gerhard, On the Norms of Charitable Giving in Islam: 58 Duso, Tomaso, Gugler, Klaus and Szücs, Florian, An Empirical Assessment of the 2004 EU Merger Policy Reform, June 2012. Published in: Economic Journal, 123 (2013), F596-F619. 57 Dewenter, Ralf and Heimeshoff, Ulrich, More Ads, More Revs? Is there a Media Bias in the Likelihood to be Reviewed?, June 2012. 56 Böckers, Veit, Heimeshoff, Ulrich and Müller Andrea, Pull-Forward Effects in the German Car Scrappage Scheme: A Time Series Approach, June 2012. 55 Kellner, Christian and Riener, Gerhard, The Effect of Ambiguity Aversion on Reward Scheme Choice, June 2012. 54 De Silva, Dakshina G., Kosmopoulou, Georgia, Pagel, Beatrice and Peeters, Ronald, The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs, June 2012. Published in: Review of Industrial Organization, 41 (2013), pp.321-343.53 Benndorf, Volker and Rau, Holger A., Competition in the Workplace: An Experimental Investigation, May 2012. 52 Haucap, Justus and Klein, Gordon J., How Regulation Affects Network and Service Quality in Related Markets, May 2012. Published in: Economics Letters, 117 (2012), pp. 521-524.51 Dewenter, Ralf and Heimeshoff, Ulrich, Less Pain at the Pump? The Effects of Regulatory Interventions in Retail Gasoline Markets, May 2012. 50 Böckers, Veit and Heimeshoff, Ulrich, The Extent of European Power Markets, April 2012. 49 Barth, Anne-Kathrin and Heimeshoff, Ulrich, How Large is the Magnitude of Fixed-Mobile Call Substitution? - Empirical Evidence from 16 European Countries, April 2012. 48 Herr, Annika and Suppliet, Moritz, Pharmaceutical Prices under Regulation: Tiered Co-payments and Reference Pricing in Germany, April 2012. 47 Haucap, Justus and Müller, Hans Christian, The Effects of Gasoline Price Regulations: Experimental Evidence, April 2012. 46 Stühmeier, Torben, Roaming and Investments in the Mobile Internet Market, March 2012. Published in: Telecommunications Policy, 36 (2012), pp. 595-607. 45 Graf, Julia, The Effects of Rebate Contracts on the Health Care System, March 2012, Forthcoming in: The European Journal of Health Economics. 44 Pagel, Beatrice and Wey, Christian, Unionization Structures in International Oligopoly, Published in: Labour: Review of Labour Economics and Industrial Relations, 27 (2013), pp. 1-17. 43 Gu, Yiquan and Wenzel, Tobias, Price-Dependent Demand in Spatial Models, January 2012. Published in: B. E. Journal of Economic Analysis & Policy, 12 (2012), Article 6. 42 Barth, Anne-Kathrin and Heimeshoff, Ulrich, Does the Growth of Mobile Markets 41 Stühmeier, Torben and Wenzel, Tobias, Regulating Advertising in the Presence of Public Service Broadcasting, January 2012. in: Review of Network Economics, 11/2 (2012), Article 1. Older discussion papers can be found online at: http://ideas.repec.org/s/zbw/dicedp.html ISSN 2190-9938 (online) ISBN 978-3-86304-139-7