Third-Degree Price Discrimination and Consumer Surplus

Simon GB Cowan and Simon Cowan
Authors registered in the RePEc Author Service: Simon Cowan

No 462, Economics Series Working Papers from University of Oxford, Department of Economics

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 more convex; second, when inverse demand functions are highly convex and the discriminatory prices are close together.

Keywords: Third-degree price discrimination; Monopoly; Consumer surplus (search for similar items in EconPapers)
JEL-codes: D42 L12 L13 (search for similar items in EconPapers)
Date: 2009-11-01
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Third-Degree Price Discrimination and Consumer Surplus (2012)
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