Informational Structure and Effciency in Monopoly
The paper focuses on efficiency under monopoly. Contrary to common wisdom, nine examples given in the paper show that a Pareto-efficient output in monopoly is possible under both linear and nonlinear pricing. Pareto efficiency can be achieved when consumers are homogeneous as well as heterogeneous. Since Pareo-efficiency is possible under different demand and cost conditions; different pricing strategies; and different degree of consumer heterogeneity, in general, monopoly per se is not the cause for ineficiency.
|Date of creation:||03 Jul 2003|
|Note:||Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP/PostScript/; pages: 25|
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References listed on IDEAS
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- Armstrong, Mark & Vickers, John, 2001. "Competitive Price Discrimination," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 579-605, Winter.
- Schmalensee, Richard, 1981.
"Output and Welfare Implications of Monopolistic Third-Degree Price Discrimination,"
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- Babu Nahata & Serguei Kokovin & Evgeny Zhelobodko, 2003. "Package Sizes, Tariffs, Quantity Discount and Premium," General Economics and Teaching 0307002, EconWPA.
- Schwartz, Marius, 1990. "Third-Degree Price Discrimination and Output: Generalizing a Welfare Result," American Economic Review, American Economic Association, vol. 80(5), pages 1259-1262, December.
- Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, vol. 75(4), pages 870-875, September. Full references (including those not matched with items on IDEAS)
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