On the Economics of the “Meeting Competition Defense” Under the Robinson–Patman Act

Aguirre, Iñaki

On the Economics of the “Meeting Competition Defense” Under the Robinson–Patman Act

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 3, 1213-1238

Abstract: This paper studies the welfare effects of third-degree price discrimination when competitive pressure varies across markets. In particular, we study the economic aspects of the Robinson–Patman Act associated with the “meeting competition defense.” Using equilibrium models, the main result we find is that this defense might be used successfully in cases of primary line injury precisely when it should not be used, namely when price discrimination reduces social welfare. This result obtains both when discrimination appears in the final good market and when it is used in the intermediate goods market. We also find that these results may maintain under secondary line injury.

Keywords: price discrimination; Robinson–Patman Act; effects on social welfare (search for similar items in EconPapers)
JEL-codes: D42 L12 L13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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DOI: 10.1515/bejeap-2015-0146

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