On the Welfare Effects of Regulating Price Discrimination

Norman J Ireland

Journal of Industrial Economics, 1992, vol. 40, issue 3, 237-48

Abstract: In a model with linear demands and constant variable costs, it is shown that a welfare gain is made by restricting the relative rather than absolute prices that a monopolist can charge for a range of products. The nature of this class of restrictions is considered. One application might occur if cost levels are unknown to the regulatory authority but costs are known to be linear functions of product characteristics. Copyright 1992 by Blackwell Publishing Ltd.

Date: 1992
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