Customer Information Sharing

Strategic Incentives and New Implications

Byung Cheol Kim, Jay Pil Choi

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)403-433
Number of pages31
JournalJournal of Economics and Management Strategy
Volume19
Issue number2
DOIs
Publication statusPublished - 2010 Jun 1

Fingerprint

Incentives
Customer information
Information sharing
Substitute
Merger analysis
Mergers
Middlemen
Consumer markets
Purchase

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation

Cite this

@article{bbae51d92fc542e9bd681cfda36df8a2,
title = "Customer Information Sharing: Strategic Incentives and New Implications",
abstract = "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.",
author = "Kim, {Byung Cheol} and Choi, {Jay Pil}",
year = "2010",
month = "6",
day = "1",
doi = "10.1111/j.1530-9134.2010.00256.x",
language = "English",
volume = "19",
pages = "403--433",
journal = "Journal of Economics and Management Strategy",
issn = "1058-6407",
publisher = "Wiley-Blackwell",
number = "2",

}

Customer Information Sharing : Strategic Incentives and New Implications. / Kim, Byung Cheol; Choi, Jay Pil.

In: Journal of Economics and Management Strategy, Vol. 19, No. 2, 01.06.2010, p. 403-433.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Customer Information Sharing

T2 - Strategic Incentives and New Implications

AU - Kim, Byung Cheol

AU - Choi, Jay Pil

PY - 2010/6/1

Y1 - 2010/6/1

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=77953883681&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=77953883681&partnerID=8YFLogxK

U2 - 10.1111/j.1530-9134.2010.00256.x

DO - 10.1111/j.1530-9134.2010.00256.x

M3 - Article

VL - 19

SP - 403

EP - 433

JO - Journal of Economics and Management Strategy

JF - Journal of Economics and Management Strategy

SN - 1058-6407

IS - 2

ER -