We normalize the market size to one (n1 + n2 + n3 +
s12 + s123 = 1) without loss of generality. Although the segment
sizes and the reservation price are common knowledge,
because of imperfect addressability and targetability,
retailers cannot price discriminately (Blattberg and
Deighton 1991; Chen, Narasimhan, and Zhang 2001). All
firms face constant fixed and marginal costs, which we
assume to be zero without loss of generality (Iyer and Pazgal
2003; Narasimhan 1988; Raju, Srinivasan, and Lal
1990). Overall, the model and its assumptions are similar to
Narasimhan’s (1988) model and other related models,
except for analyses of three firms and two switcher
segments.