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Betrand Competition with an Asymmetric No-discrimination Constraint

Author

Listed:
  • Jan Bouckaert

    (Professor, Department of Economics, Universiteit Antwerpe; Visiting Professor,Department of European Economic Studies, College of Europe (Bruges))

  • Hans Degryse

    (Department of Accountancy, Finance and Insurance, KU Leuven; Department of Finance, Universiteit Tilburg)

  • Theon van Dijk

    (Lexonomics)

Abstract

Regulators and competition authorities often prevent firms with significant market power or dominant firms from practicing price discrimination. The goal of such an asymmetric no-discrimination constraint is to encourage entry and serve consumers’ interests. This constraint prohibits the firm with significant market power to practice both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We find that this constraint hinders entry and reduces welfare when the monopolistic segment is small.

Suggested Citation

  • Jan Bouckaert & Hans Degryse & Theon van Dijk, 2012. "Betrand Competition with an Asymmetric No-discrimination Constraint," Bruges European Economic Research Papers 23, European Economic Studies Department, College of Europe.
  • Handle: RePEc:coe:wpbeer:23
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    References listed on IDEAS

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    Cited by:

    1. Oertel, Christian & Schmutzler, Armin, 2021. "Challenging the Incumbent: Entry in markets with captive consumers and taste heterogeneity," CEPR Discussion Papers 16165, C.E.P.R. Discussion Papers.
    2. Hinnerk Gnutzmann, 2014. "Price Discrimination in Asymmetric Industries: Implications for Competition and Welfare," DISCE - Working Papers del Dipartimento di Economia e Finanza def019, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    3. Stefano Colombo, 2016. "Imperfect Behavior‐Based Price Discrimination," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(3), pages 563-583, September.
    4. repec:ctc:serie1:def19 is not listed on IDEAS

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    More about this item

    Keywords

    price discrimination; dominance;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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