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On the economics of the "meeting competition defense" under the Robinson-Patman Act

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  • Aguirre Pérez, Iñaki

Abstract

In this paper we analyze the welfare effects of third-degree price discrimination when competitive pressure varies across markets. In particular, we study the economic aspects of the Robinson-Patman Act associated with the “meeting competition defense.” Using equilibrium models, the main result we find is that this defense might be used successfully in cases of primary line injury precisely when it should not be used, namely when price discrimination reduces social welfare. This result obtains both when discrimination appears in the final good market and when it is used in the intermediate goods market. We also find that these results may drastically change under secondary line injury.

Suggested Citation

  • Aguirre Pérez, Iñaki, 2015. "On the economics of the "meeting competition defense" under the Robinson-Patman Act," IKERLANAK Ikerlanak;2015-86, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  • Handle: RePEc:ehu:ikerla:14747
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    References listed on IDEAS

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    Cited by:

    1. Aguirre, Iñaki, 2017. "Cournot Oligopoly, Price Discrimination and Total Output," MPRA Paper 80166, University Library of Munich, Germany.

    More about this item

    Keywords

    price discrimination; meeting competition defense; robinson-patman act; social welfare;

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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