Price discrimination with loss averse and horizontally differentiated consumers

Jong Hee Hahn, Jinwoo Kim, Sang Hyun Kim, Jihong Lee

Research output: Contribution to journalArticlepeer-review


This paper considers a monopolist seller facing horizontally differentiated consumers, whose preferences are reference-dependent and loss averse in the frame of Kőszegi and Rabin (2006). Our results on optimal menu suggest that consumer loss aversion does not necessarily limit the benefits of screening under the horizontal demand structure, in contrast to the findings of Hahn, Kim, Kim and Lee (2018) and Herweg and Mierendorff (2013) who consider the case of vertically differentiated preferences.

Original languageEnglish
Pages (from-to)117-129
Number of pages13
JournalKorean Economic Review
Issue number2
Publication statusPublished - 2018 Jun 1

Bibliographical note

Funding Information:
This research was supported by the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2014S1A5A2A03065638). Jihong Lee acknowledges financial support from Seoul National University Asia Center (#SNUAC-2017-008).

Publisher Copyright:
© 2018, Korean Economic Association. All rights reserved.

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)


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