Third‐Degree Price Discrimination in Oligopoly when Markets are Covered

Markus Dertwinkel‐Kalt and Christian Wey

Journal of Industrial Economics, 2023, vol. 71, issue 2, 464-490

Abstract: We analyze oligopolistic third‐degree price discrimination relative to uniform pricing when markets are covered. Pricing equilibria are critically determined by supply‐side features such as the number of firms and their marginal cost differences. It follows that each firm's Lerner index under uniform pricing is equal to the weighted harmonic mean of the firm's relative margins under discriminatory pricing. Uniform pricing then lowers average prices and raises consumer surplus. We can calculate the gain in consumer surplus and loss in firms' profits from uniform pricing based only on the market data of the discriminatory equilibrium (i.e., prices and quantities).

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/joie.12325

Related works:
Working Paper: Third-Degree Price Discrimination in Oligopoly When Markets Are Covered (2021)
Working Paper: Third-Degree Price Discrimination in Oligopoly When Markets Are Covered (2020)
Working Paper: Third-degree price discrimination in oligopoly when markets are covered (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:71:y:2023:i:2:p:464-490

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().