Customer Information Sharing: Strategic Incentives and New Implications

Title: Customer Information Sharing: Strategic Incentives and New Implications
Format: Journal Article
Publication Date: May 2010
Description:

We study oligopolistic firms' incentives to share customer information about past purchase history when firms are uncertain about whether a particular consumer considers the product offerings as complements or substitutes. We show that both the incentive to share customer information and its effects on consumers depend crucially on the relative magnitudes of the prices that would prevail in the complementary and substitute markets if consumers were fully segmented according to their preferences. This paper has important implications for merger analysis when the primary motive for merger is the acquisition of another firm's customer lists. Our analysis also suggests a new role of middlemen as information aggregators.

Ivan Allen College Contributors:
External Contributors: Jay Pil Choi
Citation:

Kim, Byung-Cheol and Jay Pil Choi. "Customer Information Sharing: Strategic Incentives and New Implications." Journal of Economics & Management Strategy 19.2 (2010):  403-433.

Categories:
  • Digitization, InfoTechs, and Social Networks
  • Firm Strategy
  • Industrial Organization
Related Links:
Related Departments:
  • School of Economics