Welfare and Non-linear Pricing in a Cournot Oligopoly

Norman J Ireland

Economic Journal, 1991, vol. 101, issue 407, 949-57

Abstract: A simple second degree price discrimination model involving nonlinear pricing of packets of a homogeneous product is shown to exhibit a welfare loss compared to the situation when nonlinear pricing is prohibited. The result holds for a Cournot oligopoly as well as monopoly. Further analysis considers the welfare loss from the market supplying "too large" a packet. Copyright 1991 by Royal Economic Society.

Date: 1991
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