Pareto price discrimination
Mark J. Tremblay
Economics Letters, 2019, vol. 183, issue C, -
As the collection of consumer data becomes more common, online merchants are better equipped to price discriminate now more than ever before. While standard first-degree price discrimination benefits merchants and harms consumers relative to uniform pricing, I derive an alternative first-degree pricing strategy that achieves efficiency and Pareto improves upon the uniform pricing equilibrium. Furthermore, I show that price ceilings can enforce these Pareto price discrimination strategies, making Pareto price discrimination a viable option for merchants and policy makers.
Keywords: First-degree price discrimination; Perfect price discrimination; Personalized pricing (search for similar items in EconPapers)
JEL-codes: L12 L11 L40 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:183:y:2019:i:c:18
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