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Output and misallocation effects in monopolistic third-degree price discrimination

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Author Info
Iñaki Aguirre () (University of the Basque Country)

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Abstract

This paper shows how the welfare effects of third-degree price discrimination may be decomposed into two effects: a misallocation effect and an output effect. It also presents a geometrical analysis which shows how the welfare properties of third-degree price discrimination must be assessed using nonlinear demands, and hence how linear demands are not suitable for the analysis.

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File URL: http://economicsbulletin.vanderbilt.edu/2008/volume4/EB-08D40022A.pdf
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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 4 (2008)
Issue (Month): 11 ()
Pages: 1-11
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ebl:ecbull:v:4:y:2008:i:11:p:1-11

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Postal: Economics Bulletin, Department of Economics, 414 Calhoun Hall, Vanderbilt University, Nashville TN 37235, USA
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Related research
Keywords: Price Discrimination; Monopoly; Welfare;

Find related papers by JEL classification:
D4 - Microeconomics - - Market Structure and Pricing
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany. [Downloadable!]
  2. Simon Cowan & John Vickers, 2007. "Output and Welfare Effects in the Classic Monopoly Price Discrimination Problem," Economics Series Working Papers 355, University of Oxford, Department of Economics. [Downloadable!]
  3. Maarten Dossche & Freddy Heylen & Dirk Van den Poel, 2006. "The kinked demand curve and price rigidity : evidence from scanner data," Research series 200610-11, National Bank of Belgium. [Downloadable!]
    Other versions:
  4. Iñaki Aguirre, 2006. "Monopolistic price discrimination and output effect under conditions of constant elasticity demand," Economics Bulletin, Economics Bulletin, vol. 4(23), pages 1-6. [Downloadable!]
  5. Hubbell, Bryan J & Marra, Michele C & Carlson, Gerald A, 2000. " Estimating the Demand for a New Technology: Bt Cotton and Insecticide Policies," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(1), pages 118-32, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Simon Cowan, 2008. "When does third-degree price discrimination reduce social welfare, and when does it raise it?," Economics Series Working Papers 410, University of Oxford, Department of Economics. [Downloadable!]
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This page was last updated on 2009-11-16.

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