Input price discrimination with downstream Cournot competitors
AbstractThis Paper addresses the question of third-degree price discrimination in input markets. I propose a solution that relies on a method that decomposes the upstream monopolistâs profit into two parts, one that depends on average input prices, and one that depends on their distribution. I am able to obtain rather general results, and, in the linear demand case, I obtain a full characterization of the equilibria in the two regimes of price discrimination and price uniformity, generalizing the findings of Yoshida (2000). Under reasonable assumptions, input price discrimination negatively affects both consumer surplus and total welfare.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 21 (2003)
Issue (Month): 7 (September)
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Web page: http://www.elsevier.com/locate/inca/505551
Other versions of this item:
- Valletti, Tommaso, 2002. "Input Price Discrimination with Downstream Cournot Competitors," CEPR Discussion Papers 3570, C.E.P.R. Discussion Papers.
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
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