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Customer Recognition and Mobile Geo-Targeting

Author

Listed:
  • Irina Baye

    (Heinrich Heine University of Düsseldorf)

  • Philip Hanspach

    (European University Institute)

  • Tim Reiz

    (Heinrich Heine University of Düsseldorf)

  • Geza Sapi

    (Heinrich Heine University of Düsseldorf)

Abstract

We consider competing mobile marketers that complement geo-targeting with behavior-based pricing and send personalized offers to customers. Firms observe consumers’ locations and can infer their (heterogeneous) responsiveness to discounts from purchase histories. The overall profit effect of behavioral targeting is driven by firms’ discount factor and consumers’ transport cost and can be neutral, positive, or negative. We are the first to show that the profitability of behavioral data may depend on firms’ time preferences. We derive conditions for when firms prefer more rather than less behavioral targeting.

Suggested Citation

  • Irina Baye & Philip Hanspach & Tim Reiz & Geza Sapi, 2024. "Customer Recognition and Mobile Geo-Targeting," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(4), pages 615-644, June.
    • Handle: RePEc:kap:revind:v:64:y:2024:i:4:d:10.1007_s11151-024-09952-2
    DOI: 10.1007/s11151-024-09952-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Mobile marketing; Location targeting; Behavioral targeting; Price discrimination; Customer data;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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