Costly price discrimination

Peter Leeson and Russell Sobel

Economics Letters, 2008, vol. 99, issue 1, 206-208

Abstract: Standard theory neglects that enacting price discrimination is costly to firms. When this costliness is accounted for, perfect price discrimination is often socially inefficient. For pure monopolists it is sometimes socially inefficient. For monopolistic competitors it is always socially inefficient.

Date: 2008
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