Introduction

Takanori Adachi, Ryo Hashizume (), Takeshi Ikeda (), Tatsuhiko Nariu () and Tomohisa Okada ()
Additional contact information
Ryo Hashizume: Hannan University
Takeshi Ikeda: Daito Bunka University
Tatsuhiko Nariu: Doshisha University
Tomohisa Okada: Daito Bunka University

Chapter Chapter 1 in Recent Advances in the Theory of Third-Degree Price Discrimination, 2023, pp 2-14 from Springer

Abstract: Abstract This chapter introduces the basic economic logic behind third-degree price discrimination. We first verify the sources of inefficiency accrued from discriminatory pricing and explain the well-known result in literature: an increase in aggregate output is necessary for price discrimination to increase social welfare. We then consider how externalities on the demand side affect this result. Price discrimination can “open a market” by providing a group of consumers with a good that does not purchase it otherwise. This issue is also discussed in relation to welfare evaluation.

Keywords: Price discrimination; Social welfare; Output effects; Consumption externalities; Market opening (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-981-99-3205-4_1

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DOI: 10.1007/978-981-99-3205-4_1

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