Costly price discrimination
Standard theory neglects that enacting price discrimination is costly to firms. When this costliness is accounted for, perfect price discrimination is often socially inefficient. For pure monopolists it is sometimes socially inefficient. For monopolistic competitors it is always socially inefficient.
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- V. Bhaskar & Ted To, 2004.
"Is Perfect Price Discrimination Really Efficient? An Analysis of Free Entry,"
RAND Journal of Economics,
The RAND Corporation, vol. 35(4), pages 762-776, Winter.
- Bhaskar, V & To, Ted, 2002. "Is perfect price discrimination really efficient? An analysis of free entry," Economics Discussion Papers 8840, University of Essex, Department of Economics.
- Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-827, August.
- Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier. Full references (including those not matched with items on IDEAS)