Joana Resende

Abstract
We consider a nondurable good monopolist that collects data on its customers in order to profile them and subsequently practice price discrimination on returning cus-tomers. The monopolist's price discrimination scheme is leaky in the sense that an endogenous fraction of consumers choose to incur a privacy cost to conceal their identity when they return in the following periods. We characterize the Markov perfect equili-brium of the game under two alternative customer profiling regimes: full information acquisition (FIA) and purchase history information (PHI). In both cases, we find that, contrary to what could be expected, the monopolist's aggregate profit is not monotoni-cally increasing in the level of the privacy cost, but a U-shaped function of it, leading to ambiguous profit effects: a reduction in privacy costs increases the fraction of customers who choose to be anonymous (detrimental profit effect), but it also softens the firm's introductory price, reducing the pace at which prices targeted to new customers fall over time (positive profit effect). When comparing results under FIA and PHI, we find that market expansion is faster, and more customers conceal their identity under FIA than under PHI. Equilibrium profits are also higher in the FIA case. Although equili-brium profits are U-shaped functions of the privacy cost in both profiling regimes, they tend to be globally decreasing with the privacy cost under PHI and globally increasing under FIA.

Abstract
Using a Markov-perfect equilibrium model, we show that the use of customer data to practice intertemporal price discrimination will improve monopoly profit if and only if information precision is higher than a certain threshold level. This U-shaped relationship lends support to a popular view that knowledge is good only if it is sufficiently refined. When information accuracy can only be achieved through costly investment, we find that investing in profiling is profitable only if this allows to reach a high enough level of information precision. Consumers expected surplus being a hump-shaped function of information accuracy, we show that consumers have an incentive to lobby for privacy protection legislation which raises the cost of monopoly's investment in information accuracy. However, this cost should not dissuade firms to collect some information on customers' tastes, as the absence of consumers' profiling is actually detrimental to consumers.

Abstract
This paper investigates duopoly competition when horizontally differentiated firms are able to make personalized product-price offers to returning customers, within a behavior-based discrimination model. In the second period, firms can profile old customers according to their preferences, selling them targeted products at personalized prices. Product-price personalization (PP) allows firms to retain all old customers, eliminating second-period customer poaching. The overall profit effects of PP are shown to be ambiguous. In the second period, PP improves the matching between customers??? preferences and firms??? offers, but firms do not make any revenues in the rival???s turf. In the Bertrand outcome, second-period profits only increase for both firms if the size of their old turfs are not too different or initial products are not too differentiated. However, the additional secondperiod profits may be offset by lower first-period profits. PP is likely to increase firms??? overall discounted profits when consumers??? (firms???) discount factor is low (high) and firms??? initial products are exogenous and sufficiently different. When the location of initial products is endogenous, profits are hurt because of an additional location (strategic) effect aggravating head-to-head competition in the first period. Likewise, when a fraction of active consumers conceals their identity, PP increases second-period profits at the cost of aggressive first-period price competition. Finally, we show that the room for profitable PP enlarges considerably if firms rely on PP as an effective device to sustain tacit collusive outcomes, with firms credibly threatening to respond to first-period price deviations with

Abstract
We study price personalization in a two period duopoly with vertically differentiated products. In the second period, a firm not only knows the purchase history of all customers, as in standard Behavior Based Price Discrimination models, but it also collects detailed information on its old customers, using it to engage in price personalization. The analysis reveals that there exists a natural market for each firm, defined as the set of customers that cannot be poached by the rival in the second period. The equilibrium is unique, except when firms are ex-ante almost identical. In equilibrium, only the firm with the largest natural market poaches customers from the rival. This firm has highest profits but not necessarily the largest market share. Aggregate profits are lower than under uniform pricing. All consumers gain, total welfare is higher herein than under uniform pricing if firms' natural markets are sufficiently asymmetric. The low quality firm chooses the minimal quality level and a quality differential arises, though the exact choice for the high quality depends upon the cost specification.

Abstract
A durable good monopolist faces a continuum of heterogeneous customers who make purchase decisions by comparing present and expected price-quality offers. The monopolist designs a sequence of price-quality menus to segment the market. We consider the Markov perfect equilibrium (MPE) of a game where the monopolist is unable to commit to future price-quality menus. We obtain the novel results that: (a) under certain conditions, the monopolist covers the whole market in the first period (even when a static Mussa-Rosen monopolist would not cover the whole market), because this is a strategic means to convince customers that lower prices would not be offered in future periods and that (b) this can happen only under the stage-wise Stackelberg leadership assumption (whereby consumers base their expectations on the value of the state variable at the end of the period). Conditions under which MPE necessarily involves sequentially trading are also derived.