Monopolistic third-degree price discrimination, welfare, and vertical market structure

Xingtang Wang () and Lin Zhang ()
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Xingtang Wang: Guangdong University of Foreign Studies
Lin Zhang: Guangdong University of Foreign Studies

Review of Economic Design, 2022, vol. 26, issue 1, No 4, 75-86

Abstract: Abstract This paper reconsiders the effects of monopolistic third-degree price discrimination on welfare in a vertical market. The results indicate that monopolistic downstream third-degree price discrimination increases social welfare when the input price is determined by suppliers, regardless of whether the quality is fixed or endogenously chosen.

Keywords: Third-degree price discrimination; Welfare; Vertical market; Input price; D42; L12 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10058-021-00254-7

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