Technology Choice and Third Degree Price Discrimination in a Monopoly
AbstractThis paper studies technology choice as a relevant aspect to be considered when analyzing price discrimination and welfare. Our results reinforce the traditional wisdom that an increase in output is a necessary condition for price discrimination to improve social welfare. But we also find that the positive output effect does not need to be as large as previously supposed since, under some conditions, the monopoly will move to a socially preferred technology only if third-degree price discrimination is allowed.
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Bibliographic InfoPaper provided by School of Economics and Business Administration, University of Navarra in its series Faculty Working Papers with number 15/12.
Length: 9 pages
Date of creation: 14 Nov 2012
Date of revision:
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Web page: http://www.unav.es/facultad/econom
monopoly; technology choice; third degree price discrimination;
Find related papers by JEL classification:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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- Ikeda, Takeshi & Toshimitsu, Tsuyoshi, 2010. "Third-degree price discrimination, quality choice, and welfare," Economics Letters, Elsevier, vol. 106(1), pages 54-56, January.
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