Output and misallocation effects in monopolistic third-degree price discrimination

Iñaki Aguirre ()
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Iñaki Aguirre: University of the Basque Country

Economics Bulletin, 2008, vol. 4, issue 11, pages 1-11

Abstract: This paper shows how the welfare effects of third-degree price discrimination may be decomposed into two effects: a misallocation effect and an output effect. It also presents a geometrical analysis which shows how the welfare properties of third-degree price discrimination must be assessed using nonlinear demands, and hence how linear demands are not suitable for the analysis.

Keywords: Price Discrimination; Monopoly; Welfare (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2008-04-23
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