Is Perfect Price Discrimination Really Efficient? An Analysis of Free Entry
We analyze models of product differentiation with perfect price discrimination and free entry. With a fixed number of firms, and in the absence of coordination failures, perfect price discrimination provides incentives for firms to choose product characteristics in a socially optimal way. However, with free entry, the number of firms is always excessive. Our results apply to a large class of models of product differentiation. They also apply to models of common agency or lobbying with free entry and imply that one has excessive entry into the ranks of the principals.
|Date of creation:||09 Apr 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.essex.ac.uk/economics/
More information through EDIRC
|Order Information:|| Postal: Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K.|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany.
- Stuart, Harborne Jr., 2004. "Efficient spatial competition," Games and Economic Behavior, Elsevier, vol. 49(2), pages 345-362, November.
- Dirk & Juuso Valimaki, 1998.
"Dynamic Common Agency,"
Cowles Foundation Discussion Papers
1206, Cowles Foundation for Research in Economics, Yale University.
- Kenneth S. Corts, 1998. "Third-Degree Price Discrimination in Oligopoly: All-Out Competition and Strategic Commitment," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 306-323, Summer.
When requesting a correction, please mention this item's handle: RePEc:esx:essedp:537. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Essex Economics Web Manager)
If references are entirely missing, you can add them using this form.