The cost effect in third-degree price discrimination

Francisco Galera (), Markus Kinateder and Pedro Mendi

Journal of Economics, 2014, vol. 113, issue 2, 175-186

Abstract: In the presence of a non-constant marginal cost and demand uncertainty, we show that an output increase is no longer a necessary condition for welfare to increase following the introduction of third-degree price discrimination. We thus highlight the existence of an effect that might offset the well known output and misallocation effects of price discrimination. We propose a specific example where this is indeed the case. Copyright Springer-Verlag Wien 2014

Keywords: Monopoly; Third-degree price discrimination; Uncertainty; Welfare; Cost effect; D42; L12; D81 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:113:y:2014:i:2:p:175-186

DOI: 10.1007/s00712-013-0368-y

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