Incomplete third-degree price discrimination, and market partition problem
AbstractWe introduce in this paper the "incomplete" third-degree price discrimination, which is the situation where a monopolist must charge at most k different prices while the total market is composed of n markets, with n>k. We thus study the optimal partition problem of the n markets in k groups. As a byproduct, when k=2, we are able to reconsider the so-called (Robinsonian) weak-strong partition.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 4 ()
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Price discrimination; monopoly; decentralized decision process; optimal partition problem; profit maximization;
Find related papers by JEL classification:
- L0 - Industrial Organization - - General
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier.
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