A Sufficient Statistics Approach for Welfare Analysis of Oligopolistic Third-Degree Price Discrimination

Takanori Adachi and Michal Fabinger

Discussion papers from Graduate School of Economics , Kyoto University

Abstract: This paper proposes a sufficient statistics approach to welfare analysis of third-degree price discrimination in differentiated oligopoly. Specifically, our sufficient conditions for price discrimination to increase or decrease aggregate output, social welfare, and con-sumer surplus simply entail a cross-market comparison of multiplications of two or three of the sufficient statistics—pass-through, conduct, and profit margin—that are functions of first-order and second-order elasticities of the firm’s demand. Notably, these results are derived under a general class of demand, and can be readily be extended to accom-modate heterogeneous firms. These features suggest that our approach has potential for conducting welfare analysis without a full specification of an oligopoly model.

Keywords: Third-Degree Price Discrimination; Oligopoly; Sufficient Statistics. (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 (search for similar items in EconPapers)
Pages: 64
Date: 2021-10
New Economics Papers: this item is included in nep-com, nep-cwa, nep-gth, nep-ind, nep-mic, nep-ore and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.econ.kyoto-u.ac.jp/dp/papers/e-21-005.pdf (application/pdf)

Related works:
Journal Article: A sufficient statistics approach for welfare analysis of oligopolistic third‐degree price discrimination (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kue:epaper:e-21-005

Access Statistics for this paper

More papers in Discussion papers from Graduate School of Economics , Kyoto University Contact information at EDIRC.
Bibliographic data for series maintained by Graduate School of Economics Project Center ().