De Nijs, Romain and Rhodes, Andrew (2013) Behavior - based pricing with experience goods. Economics Letters, vol. 118 (n° 1). pp. 155-158.

Abstract

We consider a two-period model in which duopolists sell experience goods and practice behavior-based price discrimination (BBPD). We give general conditions for when firms should offer a lower price to existing customers (`pay-to-stay') or to new customers (`pay-to-switch'). We also demonstrate that unlike previous results, BBPD may intensify competition in the first period but weaken it in the second.