On the inefficiency of perfect price discrimination

Camelia Bejan

Economics Letters, 2021, vol. 208, issue C

Abstract: In a general equilibrium model with at least three goods, a perfectly price-discriminating monopoly (PDM) selects an inefficient production plan even if consumers are homogeneous, their preferences are representable by quasi-linear utilities, and their characteristics are known to the monopolist. In the same setting, regulation via a two-part tariff induces an efficient equilibrium allocation.

Keywords: Perfect price discrimination; Inefficiency; Monopoly; Regulation (search for similar items in EconPapers)
JEL-codes: D21 D52 G20 L21 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:208:y:2021:i:c:s016517652100361x

DOI: 10.1016/j.econlet.2021.110084

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