Price Discrimination Based On Imperfect Information: Necessary and Sufficient Conditions

Hans Wiesmeth

The Review of Economic Studies, 1982, vol. 49, issue 3, 391-402

Abstract: Usually, the information a buyer requires in order to obtain the lowest price must be produced at a cost depending on the efficiency with which the buyers gather information. Thus, a suitable price dispersion enables a monopolist to split up the market to permit a more profitable price discrimination. In this paper, necessary and sufficient conditions for the existence of a non-trivial profit maximizing price dispersion are considered. Furthermore, the relationship between statistical properties of the set of consumers' characteristics and this existence problem are studied.

Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:49:y:1982:i:3:p:391-402.

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