Output and misallocation effects in monopolistic third-degree price discrimination
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.
Volume (Year): 4 (2008)
Issue (Month): 11 ()
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