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Third-degree price discrimination and consumer surplus

Abstract:

This paper presents simple conditions for monopoly third-degree price discrimination to have negative or positive effects on aggregate consumer surplus. Consumer surplus is often reduced by discrimination, for example when total welfare (consumer surplus and profits) falls. Surplus increases with discrimination, however, in two cases: first, when the marginal revenues without discrimination are close together and inverse demand in the market where the price will fall with discrimination is ...

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Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2009-11-01
Paper number:
462
Keywords:
Pubs id:
1143966
Local pid:
pubs:1143966
Deposit date:
2020-12-15

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