Analysis of dynamic pricing based on price discrimination through two models

We discuss in this paper whether firms will benefit from dynamic pricing based on price discrimination. We will adopt two methods to analyse this problem. One focuses on the dynamic pricing of competing firms based on consumer purchase history for achieving customer recognition. The other targets dynamic pricing of duopoly based on price discrimination under the prerequisite of ensuring the profit of loyal consumers. In addition, we will make a comparison between the two methods, including common points and differences. We conclude that firms that implement dynamic pricing based on price discrimination will be better off than those that do not. Furthermore, we can reach the crucial conclusion that the strong firm which charges a high price is definitely to make more profit by dynamic pricing based on price discrimination.