Bertrand competition with an asymmetric no-discrimination constraint

Jan Bouckaert, Hans Degryse and Theon van Dijk;

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: We study the competitive and welfare consequences when only one firm must commit to uniform pricing while the competitor's pricing policy is left unconstrained. The asymmetric no-discrimination constraint prohibits both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We find that an asymmetric no-discrimination constraint only leads to higher profits for the unconstrained firm if the monopolistic segment is large enough. Therefore, a regulatory policy objective of encouraging entry is not served by an asymmetric no-discrimination constraint if the monopolistic segment is small. Only when the monopolistic segment is small and rivalry exists in the competitive segment does the asymmetric no-discrimination constraint enhance welfare.

JEL-codes: D11 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012-02
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https://repository.uantwerpen.be/docman/irua/74b883/89030588.pdf (application/pdf)

Related works:
Journal Article: Bertrand Competition with an Asymmetric No-discrimination Constraint (2013)
Working Paper: Betrand Competition with an Asymmetric No-discrimination Constraint (2012)
Working Paper: Bertrand Competition with an Asymmetric No-Discrimination Constraint (2012)
Working Paper: Bertrand Competition with an Asymmetric No-Discrimination Constraint (2012)
Working Paper: Bertrand Competition with an Asymmetric No-Discrimination Constraint (2012)
Working Paper: Bertrand Competition with an Asymmetric No-Discrimination Constraint (2012)
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