Spatial Price Discrimination and Mill Pricing: Hypermobile Multiplant Monopoly

Richard J Claycombe

Journal of Industrial Economics, 1991, vol. 39, issue 6, 723-28

Abstract: For almost two decades a literature has accumulated claiming that a monopolist can have better performance in terms of output, price, and welfare if it employs spatial price discrimination rather than mill pricing. This view is, however, based on the notion of a spatially isolated firm. This paper offers an alternative view of spatial monopoly where firms are contiguous under both pricing schemes and shows how this approach yields findings in favor of mill pricing. Copyright 1991 by Blackwell Publishing Ltd.

Date: 1991
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