Marketing Letters

, Volume 23, Issue 2, pp 423–438 | Cite as

Price discrimination in service industries

  • Anja Lambrecht
  • Katja Seim
  • Naufel Vilcassim
  • Amar Cheema
  • Yuxin Chen
  • Gregory S. Crawford
  • Kartik Hosanagar
  • Raghuram Iyengar
  • Oded Koenigsberg
  • Robin Lee
  • Eugenio J. Miravete
  • Ozge Sahin


This article outlines recent methods and applications directed at understanding the profit and consumer welfare implications of increasingly prevalent price discrimination strategies in the service sector. These industries are typically characterized by heterogeneity in consumers’ valuation and usage of the service, resale constraints, and a focus on price as the service’s key attribute. The article focuses on how firms use nonlinear pricing or bundling strategies to benefit from the heterogeneity in consumer demand. We describe the basic economic model commonly used in the literature to analyze such strategic choices and present recent methodological improvements to this benchmark. A discussion of existing applications and future research opportunities concludes the article.


Nonlinear pricing Bundling Service industries 


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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Anja Lambrecht
    • 1
  • Katja Seim
    • 2
  • Naufel Vilcassim
    • 1
  • Amar Cheema
    • 3
  • Yuxin Chen
    • 4
  • Gregory S. Crawford
    • 5
  • Kartik Hosanagar
    • 2
  • Raghuram Iyengar
    • 2
  • Oded Koenigsberg
    • 6
  • Robin Lee
    • 7
  • Eugenio J. Miravete
    • 8
  • Ozge Sahin
    • 9
  1. 1.London Business SchoolLondonUK
  2. 2.Wharton SchoolUniversity of PennsylvaniaPhiladelphiaUSA
  3. 3.University of VirginiaCharlottesvilleUSA
  4. 4.Northwestern UniversityEvanstonUSA
  5. 5.University of WarwickCoventryUK
  6. 6.London Business SchoolLondonUK
  7. 7.Stern School of BusinessNew York UniversityNew YorkUSA
  8. 8.University of Texas at Austin & CEPRAustinUSA
  9. 9.Carey Business SchoolJohns Hopkins UniversityBaltimoreUSA

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