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Betrand Competition with an Asymmetric No-discrimination Constraint

Jan Bouckaert, Hans Degryse and Theon van Dijk
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Theon van Dijk: Lexonomics

No 23, Bruges European Economic Research Papers from European Economic Studies Department, College of Europe

Abstract: Regulators and competition authorities often prevent firms with significant market power or dominant firms from practicing price discrimination. The goal of such an asymmetric no-discrimination constraint is to encourage entry and serve consumers’ interests. This constraint prohibits the firm with significant market power to practice both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We find that this constraint hinders entry and reduces welfare when the monopolistic segment is small.

Keywords: price discrimination; dominance (search for similar items in EconPapers)
JEL-codes: D11 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012-06
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Journal Article: Bertrand Competition with an Asymmetric No-discrimination Constraint (2013) Downloads
Working Paper: Bertrand competition with an asymmetric no-discrimination constraint (2012) Downloads
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