This study examines the impacts of behavior-based price discrimination (BBPD) on profits, consumer surplus, and welfare when firms choose their product qualities. To this end, we consider a differentiated duopoly model in which firms first make quality decisions, and in the two subsequent periods, compete in prices according to the pricing scheme, namely, uniform pricing or BBPD. We show that when consumers are more than moderately forward-looking, firms choose lower quality levels under BBPD than under uniform pricing. The profit and consumer surplus effects of BBPD relative to uniform pricing depend on the level of consumers’ myopia and/or quality improvement costs. When consumers are sufficiently myopic or quality costs are high, BBPD reduces industry profits and raises consumer surplus. However, the reverse happens when consumers are sufficiently forward-looking and quality costs are low. Interestingly, BBPD is detrimental to both firms and consumers when consumers are sufficiently forward-looking and quality costs are moderate, or when consumers are moderately forward-looking and quality costs are low. Social welfare is always lower under BBPD than under uniform pricing.

中文翻译：

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质量选择和基于行为的价格歧视

本研究考察了当企业选择产品质量时基于行为的价格歧视 (BBPD) 对利润、消费者剩余和福利的影响。为此，我们考虑一种差异化双头垄断模型，在该模型中，企业首先做出质量决策，然后在随后的两个时期根据定价方案进行价格竞争，即统一定价或 BBPD。我们表明，当消费者具有适度的前瞻性时，公司在 BBPD 下选择比统一定价下更低的质量水平。BBPD 相对于统一定价的利润和消费者剩余效应取决于消费者的近视程度和/或质量改进成本。当消费者足够近视或质量成本很高时，BBPD 会降低行业利润并增加消费者剩余。然而，当消费者具有足够的前瞻性并且质量成本较低时，就会发生相反的情况。有趣的是，当消费者具有足够的前瞻性且质量成本适中时，或者当消费者具有适度的前瞻性且质量成本较低时，BBPD 对企业和消费者都是有害的。BBPD 下的社会福利总是低于统一定价下的。