Abstract
We analyze behavior-based price discrimination from an antitrust perspective by focusing on an industry with inherited market dominance. Under horizontal dierentiation persistence of dominance requires that the dominant rm is protected by suciently signicant advantages in switching costs or production costs. When an incumbent faces an entrant with no access to consumers’ purchase histories the degree of dominance persistence is invariant across the regimes with behavior-based pricing and uniform pricing. Under vertical dierentiation, the lock-in eects of customer relationships are quality-contingent. We characterize when market dominance persists for the high-quality rm with behavior-based pricing and compare
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