This article studies the consequences of price discrimination in a market for experts’ services. In the case of experts markets, where the expert observes the intervention that a consumer needs to fix his problem and also provides a treatment, price discrimination proceeds along the dimension of quality of advice offered. High quality advice and appropriate treatment is provided to the most pro...

Price discrimination is an extremely common type of pricing strategy engaged in by virtually every business with some discretionary pricing power. The issue of whether price discrimination reduces or increases social welfare has been considered by economists since at least 1920. At that time, it was demonstrated that, under certain (restrictive) conditions, price discrimination will reduce soci...

Textbooks present the three ‘degrees’ of price discrimination as a sequence of independent pricing methods. These textbook treatments consequently provide inadequate insight as to when a firm might adopt a particular pricing strategy. The paper describes an informationbased taxonomy of price discrimination, which can be used to teach monopolistic price discrimination in an integrated way. The p...

We employ a vertical differentiation model to examine the potential bias in pricing-to-market results when using export unit values aggregating differentiated products. Our results show that: (i) false evidence of pricing-to-market is always found when using unit values, whether the law of one price holds or not; and (ii) the size of the bias increases with the level of product differentiation....

W consider a general model of monopoly price discrimination and characterize the conditions under which price discrimination is and is not profitable. We show that an important condition for profitable price discrimination is that the percentage change in surplus (i.e., consumers’ total willingness to pay, less the firm’s costs) associated with a product upgrade is increasing in consumers’ will...

The hypothesis that price discrimination exploiting the consumer's willingness to pay for quality can occur in multi-firm industries is confirmed using microdata on retail gasoline prices. A test based on the price differentials at stations providing only one service quality (full or self service) and stations providing both qualities is developed and implemented with controls for variations in...

A regulated upstream monopolist supplies an essential input to firms in a downstream market. Non-price discrimination or sabotage becomes a concern when the upstream monopolist vertically integrates downstream. This article develops a simulation algorithm to determine the likelihood that discrimination will arise in equilibrium using data from the US long-distance market. Based on 1000 random d...

BEA economist looks at sumers essentially separate tion strategies at an airline, the airline price strategies themselves through the ticket authors developed a simple the-The role of pricing strategies, choices that they make. This oretical model of second-degree which can have a profound im­ type of self selection is referred price discrimination and applied pact on companies' profitability, ...

This paper considers the optimal regulation of access charges, and the effect such regulation has on incentives for non-price discrimination. I show that when a vertically integrated firm is able to discriminate against rivals by means of non-price measures, optimal access charges must be set higher than in the case when no discrimination is possible since the level of the access charge affects...