Recent advances in intelligent pricing softwares have created numerous opportunities for retailers to turn customer information into additional profits through targeted pricing: charging different prices to different market segments directly or indirectly based on customer demographics. However,...

We investigate how firms' incentives to acquire customer data for targeted offers depend on its quality. A two-dimensional Hotelling model is proposed where consumers are heterogeneous both with respect to their locations and transportation cost parameters (flexibility). Firms have perfect data...