IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2610.10172.html

Price Discrimination and Revealed Consumer Welfare

Author

Listed:
  • Jo~ao Thereze

    (Fuqua School of Business, Duke University)

  • Udayan Vaidya

    (Fuqua School of Business, Duke University)

Abstract

We take a revealed-preference approach to study the welfare effects of price discrimination. An analyst observes price and quantity data before and after a monopolist segments the market. The analyst knows neither the aggregate demand curve nor the information available to the monopolist. We characterize the set of observable price-quantity pairs that are rationalizable by some market segmentation. We then obtain sharp bounds on the change in consumer surplus arising from some segmentation. Finally, we provide conditions under which the data identifies an unambiguous increase (decrease) in consumer surplus.

Suggested Citation

  • Jo~ao Thereze & Udayan Vaidya, 2026. "Price Discrimination and Revealed Consumer Welfare," Papers 2610.10172, arXiv.org.
    • Handle: RePEc:arx:papers:2610.10172
    as

    Download full text from publisher

    File URL: https://arxiv.org/pdf/2610.10172
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shih, Jun-ji & Mai, Chao-cheng & Liu, Jung-chao, 1988. "A General Analysis of the Output Effect under Third-Degree Price Discrimination," Economic Journal, Royal Economic Society, vol. 98(389), pages 149-158, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aguirre, Iñaki, 2019. "Oligopoly price discrimination, competitive pressure and total output," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 13, pages 1-16.
    2. Yann Braouezec, 2013. "The Welfare Effects of Regulating the Number of Market Segments," Working Papers 2013-ECO-11, IESEG School of Management.
    3. Braouezec, Yann, 2016. "On the welfare effects of regulating the number of discriminatory prices," Research in Economics, Elsevier, vol. 70(4), pages 588-607.
    4. Ludsteck, Johannes, 2006. "Employment effects of centralization in wage setting in a median voter model," IAB-Discussion Paper 200602, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Yang, Chin W. & Peng, Hsiao P. & Li, Jian F., 1996. "The optimum uniform and discriminatory taxes or tariffs of third-degree price discrimination," International Review of Economics & Finance, Elsevier, vol. 5(1), pages 77-84.
    6. repec:ebl:ecbull:v:4:y:2008:i:11:p:1-11 is not listed on IDEAS
    7. 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.
    8. Hong Hwang & Chao‐Cheng Mai & Hiroshi Ohta, 2010. "Who Benefits From Pricing Regulations When Economic Space Matters?," The Japanese Economic Review, Japanese Economic Association, vol. 61(2), pages 218-233, June.
    9. repec:ehu:ikerla:6509 is not listed on IDEAS
    10. Li, Youping & Zhang, Jianhu, 2024. "The welfare effects of input price discrimination revisited," International Journal of Industrial Organization, Elsevier, vol. 95(C).
    11. Yann Braouezec, 2009. "Incomplete third-degree price discrimination, and market partition problem," Economics Bulletin, AccessEcon, vol. 29(4), pages 2908-2917.
    12. repec:ehu:ikerla:11103 is not listed on IDEAS
    13. Kupper, G. & Willems, Bert, 2007. "Arbitrage in Energy Markets : Competing in the Incumbent's Shadow," Discussion Paper 2007-034, Tilburg University, Tilburg Law and Economic Center.
    14. Simon Cowan, 2012. "Third-Degree Price Discrimination and Consumer Surplus," Journal of Industrial Economics, Wiley Blackwell, vol. 60(2), pages 333-345, June.
    15. Iñaki Aguirre & Simon Cowan & John Vickers, 2010. "Monopoly Price Discrimination and Demand Curvature," American Economic Review, American Economic Association, vol. 100(4), pages 1601-1615, September.
    16. repec:ebl:ecbull:v:4:y:2006:i:23:p:1-6 is not listed on IDEAS
    17. Adam N. Elmachtoub & Vishal Gupta & Michael L. Hamilton, 2021. "The Value of Personalized Pricing," Management Science, INFORMS, vol. 67(10), pages 6055-6070, October.
    18. Simon Cowan, 2017. "A Model of Third-Degree Price Discrimination with Positive Welfare Effects," Economics Series Working Papers 829, University of Oxford, Department of Economics.
    19. Simon Cowan, 2016. "Welfare-increasing third-degree price discrimination," RAND Journal of Economics, RAND Corporation, vol. 47(2), pages 326-340, May.
    20. 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.
    21. 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.
    22. Simon GB Cowan & Simon Cowan, 2008. "When does third-degree price discrimination reduce social welfare, and when does it raise it?," Economics Series Working Papers 410, University of Oxford, Department of Economics.
    23. Yongmin Chen & Marius Schwartz, 2015. "Differential pricing when costs differ: a welfare analysis," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 442-460, June.
    24. Jota Ishikawa, 2004. "From Segmented Markets to Integrated Markets: an Analysis of Economic Integration and Antidumping Legislation," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 706-722, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2610.10172. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: https://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.