Retention or Acquisition? Behavior-Based Quality Disclosure

• 成果类型: Article; Early Access
• 署名作者: Zhang, Jianqiang; Li, Krista J.
• 署名单位: Jiangnan University; Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.01081
• 发表日期: 2025
• 关键词: quality disclosure; behavior-based pricing; customer relationship management; game theory

摘要

Firms frequently extend their brand by introducing products in new categories and offering free samples or demonstrations for customers to learn about the quality of the new products before purchasing. When introducing new products based on customers' purchase behavior in the former category, firms face two customer segments: their own customers and the competitor's customers. Firms can practice behavior-based pricing (BBP) by charging different prices in the two segments. Moreover, firms can practice behavior-based quality disclosure (BBD) by disclosing quality information to the two customer segments differently. In this paper, we examine how firms practice BBD in addition to BBP. We find that in contrast to the acquisition-focused BBP, firms perform retentionfocused BBD by increasing quality disclosure to their own customers and decreasing it to the competitor's customers. Unlike BBP, which decreases second-period profit and increases first-period profit, BBD increases second-period profit but decreases first-period profit when the disclosure cost is low. We also show that when firms endogenously choose BBD, the equilibrium is a prisoner's dilemma when the disclosure cost is low and a winwin outcome when the disclosure cost is high.