A Model of Shareholder Discounts

Xiangkang Yin

No 1999.04, Working Papers from School of Economics, La Trobe University

Abstract: Many companies supplying consumption goods and services provide their shareholders with price discounts when they consume them. Although this practice is not uncommon it has not been analysed to date. This paper presents a simple model describing shareholder discounts and consequent market equilibrium, which resembles some features of two-part tariffs. The welfare analysis shows that discounts definitely increase major shareholders' wealth in contrast to the benchmark case of uniform pricing. Their effects on consumers and the whole society are generally ambiguous but certain sufficient conditions ensuring definite conclusions are given. It is also found that the equilibrium outcome of shareholder discount is Pareto inefficient.

Keywords: Market Structure; Shareholders; Industry EDIRC Provider-Institution: RePEc:edi:smlatau (search for similar items in EconPapers)
Pages: 23 pages
Date: 1999
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: A Model of Shareholder Discounts (2001)
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:ltr:wpaper:1999.04

Access Statistics for this paper

More papers in Working Papers from School of Economics, La Trobe University Contact information at EDIRC.
Bibliographic data for series maintained by Stephen Scoglio ( this e-mail address is bad, please contact ).