Adoption of personalized pricing in a supply chain

By considering a two‐segment consumer market, we investigate the impact of selling formats on the adoption of personalized pricing (PP). We find that (i) when the valuation of the two segments is (not) close, PP is more likely to be implemented under the wholesale (agency) model; (ii) when the high‐type segment is relatively large (small), the likelihood of PP is higher (lower) under the agency model; (iii) the likelihood is non‐monotonic in the size of the high‐type segment and low‐type consumers' valuation; (iv) the player that bears the cost of PP is better off when the adoption becomes more costly.