Wholesale price discrimination with regulatory asymmetry

Andreas Asseyer

No 2020/1, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: This paper studies the welfare effects of wholesale price discrimination between downstream firms operating under different regulatory systems. I model a monopolistic intermediate good market in which production cost differences between downstream firms may be due to regulatory or technological asymmetries. Price discrimination reduces regulatory distortions but may lower productive efficiency. Therefore, price discrimination increases welfare if regulation is the dominant source of cost differences. This provides a novel welfare rationale for exempting wholesale markets from the recent ban on geo-blocking in the EU.

Keywords: Price discrimination; Intermediate good markets; International price discrimination; Geo-blocking (search for similar items in EconPapers)
JEL-codes: D43 L11 L42 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:20201

DOI: 10.17169/refubium-26138

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