Welfare-increasing third-degree price discrimination
نویسندگان
چکیده
منابع مشابه
Third-degree Price Discrimination
IN THE LITERATURE OF monopolistic third-degree price discrimination, it has been widely held that a change in aggregate Marshallian social welfare by price discrimination is negative if total output decreases. Among others, Schwartz [1990] verifies this conjecture for any total cost function that depends only on total output, not on its distribution among markets. Letting ∆X and ∆W denote a cha...
متن کاملWelfare and output in third-degree price discrimination: A note
In this note I provide examples to show that, contrary to what is widely believed, when changing from an uniform price to a third-degree price discrimination situation, an improvement in welfare is possible with output reduction, if there is more than one firm.
متن کاملA Note on Third-degree Price Discrimination
VARIAN [1985] AND SCHWARTZ [1990] PROVED THAT, very generally, monopolistic third-degree price discrimination decreases aggregate welfare if total output falls (a conjecture which dates back to the work of A. C. Pigou, [1920]). In particular, these authors adopted a representative consumer approach (by assuming quasi-linear preferences) and used revealed-preference arguments. En passant, their ...
متن کاملLimit pricing under third-degree price discrimination
We consider an incumbent who operates in two independent markets and has private information about his production cost. In one of the markets, there is a potential entrant o¤ering a di¤erentiated product. The most reasonable perfect bayesian equilibrium is either the least cost separating equilibrium or the pooling equilibrium where both types of incumbents set the low cost monopoly prices. The...
متن کاملThe Welfare Effects of Third Degree Price Discrimination In Intermediate Good Markets: The Case of Bargaining
This paper examines the welfare effects of third degree price discrimination by an intermediate good monopolist selling to downstream firms with bargaining power. One of the downstream firms (the “chain store”) may have a greater ability than rivals to integrate backward into the supply of the input. In addition to this outside option, the firms’ relative bargaining powers depend on their disag...
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ژورنال
عنوان ژورنال: The RAND Journal of Economics
سال: 2016
ISSN: 0741-6261
DOI: 10.1111/1756-2171.12128