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The welfare effects of third-degree price discrimination.

Abstract:

The welfare effects of third-degree price discrimination are known to be negative when demand functions are linear, marginal cost is constant and all markets are served. This paper shows that discrimination lowers welfare for a more general class of demand functions. Demand varies across markets with additive and multiplicative shift factors. Total welfare (defined as consumer surplus plus profits) with discrimination is lower that with uniform pricing when the density function of consumer va...

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Publisher:
Department of Economics (University of Oxford)
Series:
Discussion paper series
Publication date:
2004-01-01
Language:
English
UUID:
uuid:2f77769f-560e-414c-89b6-5bd440c2e193
Local pid:
ora:1244
Deposit date:
2011-08-15

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