Competitive Price Targeting with Smartphone Coupons
通过两家影院同时发放移动优惠券的实地实验，研究竞争环境下基于消费者位置和行为的价格定向策略对利润的影响，发现竞争反应会改变不同定向方式的盈利性。
With the cooperation of a large mobile service provider, we conduct a novel field experiment that simultaneously randomizes the prices of two competing movie theaters using mobile coupons. Unlike studies that vary only one firm’s prices, our experiment allows us to account for competitor response. We test mobile targeting based on consumers’ real-time and historic locations, allowing us to evaluate popular mobile coupon strategies in a competitive market. The experiment reveals substantial profit gains from mobile discounts during an off-peak period. Both firms could create incremental profits by targeting their competitor’s location. However, the returns to such “geoconquesting” are reduced when the competitor also launches its own targeting campaign. We combine our experimentally generated data with a demand model to analyze optimal pricing in a static Bertrand–Nash equilibrium. Interestingly, competitive responses raise the profitability of behavioral targeting where symmetric pricing incentives soften price competition. By contrast, competitive responses lower the profitability of geographic targeting, where asymmetric pricing incentives toughen price competition. If we endogenize targeting choice, both firms would choose behavioral targeting in equilibrium, even though more granular geobehavioral targeting combining both real-time and historic locations is possible. These findings demonstrate the importance of considering competitor response when piloting novel price-targeting mechanisms. Data are available at https://doi.org/10.1287/mksc.2017.1042 .