The interaction between personalized pricing and multi-item purchases: A random utility model approach

We construct a duopolistic random utility model to investigate the effect of personalized pricing on consumers and firms, allowing consumers to purchase from both firms. Under an exponential distribution, personalized pricing always benefits firms but can either benefit or harm consumer welfare. • We investigate the effect of personalized pricing under a random utility model. • Consumers can purchase from both firms. • The valuation for each product follows an exponential distribution. • Personalized pricing always benefits firms. • Personalized pricing can either benefit or harm consumer welfare.