1 Økonomisk Institut, Department of Economics, Faculty of Social Sciences, Københavns Universitet2 Økonomisk Institut, Department of Economics, Faculty of Social Sciences, Københavns Universitet
This paper addresses price transparency on the consumer side in markets with behavioral price discrimination which feature welfare reducing brand switching. When long-term contracts are not available, an increase in transparency intensifies competition, lowers prices and profits, reduces brand switching and benefits consumers and welfare. With long-term contracts, an increase in transparency reduces the use of long-term contracts, leading to more brand switching and a welfare loss. Otherwise, the results are the same as without long-term contracts.