On the output criterion for price discrimination
We argue that the output criterion for price discrimination is not robust to the introduction of even arbitrarily small marginal cost differences. However, welfare improvements can be validly assessed by replacing it with the computation of well-known price indexes which are not informatively more demanding.
Volume (Year): 29 (2009)
Issue (Month): 4 ()
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- Schwartz, Marius, 1990. "Third-Degree Price Discrimination and Output: Generalizing a Welfare Result," American Economic Review, American Economic Association, vol. 80(5), pages 1259-62, December.
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- Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, vol. 75(4), pages 870-75, September.
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- Sofronis K. Clerides, 2004. "Price Discrimination with Differentiated Products: Definition and Identification," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 402-412, July.
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