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Monopolistic price discrimination and output effect under conditions of constant elasticity demand

Author

Listed:
  • Iñaki Aguirre

    () (Universidad del País Vasco)

Abstract

The paper proves that monopolistic price discrimination increases output under conditions of constant demand elasticity. The demonstration is simpler than that of Formby, Layson and Smith (1983)

Suggested Citation

  • Iñaki Aguirre, 2006. "Monopolistic price discrimination and output effect under conditions of constant elasticity demand," Economics Bulletin, AccessEcon, vol. 4(23), pages 1-6.
  • Handle: RePEc:ebl:ecbull:eb-06d40012
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    References listed on IDEAS

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    1. Schwartz, Marius, 1990. "Third-Degree Price Discrimination and Output: Generalizing a Welfare Result," American Economic Review, American Economic Association, pages 1259-1262.
    2. Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, pages 870-875.
    3. W. Leontief, 1940. "The Theory of Limited and Unlimited Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 54(3), pages 490-501.
    4. Formby, John P & Layson, Stephen K & Smith, W James, 1983. "Price Discrimination, 'Adjusted Concavity,' and Output Changes under Conditions of Constant Elasticity," Economic Journal, Royal Economic Society, vol. 93(372), pages 892-899, December.
    5. Schmalensee, Richard, 1981. "Output and Welfare Implications of Monopolistic Third-Degree Price Discrimination," American Economic Review, American Economic Association, pages 242-247.
    6. Greenhut, M L & Ohta, H, 1976. "Joan Robinson's Criterion for Deciding Whether Market Discriminntion Reduces Output," Economic Journal, Royal Economic Society, vol. 86(341), pages 96-97, March.
    7. Schmalensee, Richard., 1980. "Output and welfare implications of monopolistic third-degree price discrimination," Working papers 1095-80., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    8. Galera, Francisco & Zaratiegui, Jesus M., 2006. "Welfare and output in third-degree price discrimination: A note," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 605-611, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Poudou, Jean-Christophe & Roland, Michel, 2014. "Efficiency of uniform pricing in universal service obligations," International Journal of Industrial Organization, Elsevier, pages 141-152.
    2. Iñaki Aguirre & Simon G. Cowan, 2015. "Monopoly price discrimination with constant elasticity demand," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 329-340, October.
    3. Simon Cowan, 2016. "Welfare-increasing third-degree price discrimination," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 326-340, May.
    4. John Vickers & Simon Cowan, 2007. "Output and Welfare Effects in the Classic Monopoly Price Discrimination Problem," Economics Series Working Papers 355, University of Oxford, Department of Economics.
    5. Iñaki Aguirre, 2008. "Output and misallocation effects in monopolistic third-degree price discrimination," Economics Bulletin, AccessEcon, vol. 4(11), pages 1-11.
    6. Aguirre Pérez, Iñaki, 2009. "Joan Robinson Was Almost Right: Output under Third-Degree Price Discrimination," IKERLANAK 2009-38, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    7. Iñaki Aguirre & Simon Cowan & John Vickers, 2010. "Monopoly Price Discrimination and Demand Curvature," American Economic Review, American Economic Association, pages 1601-1615.
    8. Yeung-Nan Shieh, 2006. "Monopsonistic wage discrimination and employment effect under conditions of constant labor supply elasticity," Economics Bulletin, AccessEcon, vol. 4(32), pages 1-4.
    9. Paolo Bertoletti, 2009. "On the output criterion for price discrimination," Economics Bulletin, AccessEcon, vol. 29(4), pages 2951-2956.
    10. Aguirre Pérez, Iñaki, 2009. "Joan Robinson Was Almost Right: Output under Third-Degree Price Discrimination," IKERLANAK 2009-38, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.

    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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