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Title Price Discrimination with Loss Averse and Horizontally Differentiated Consumers
Author Jong-Hee Hahn (Yonsei University), Jinwoo Kim(Seoul National University), Sang-Hyun Kim(Yonsei University) and Jihong Lee (Seoul National University)
Volume 34 Number 2
Pages 117-129 
Keywords Price Discrimination, Hotelling Preferences, Reference-dependent Preferences, Loss aversion, Personal Equilibrium, Preferred Personal Equilibrium
Abstract This paper considers a monopolist seller facing horizontally differentiated consumers,
whose preferences are reference-dependent and loss averse in the frame of Kőszegi and Rabin
(2006). Our results on optimal menu suggest that consumer loss aversion does not necessarily
limit the benefits of screening under the horizontal demand structure, in contrast to the
findings of Hahn, Kim, Kim and Lee (2018) and Herweg and Mierendorff (2013) who
consider the case of vertically differentiated preferences.
File KER-20180701-34-2-01.pdf
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