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Cournot Oligopoly, Price Discrimination and Total Output

Iñaki Aguirre ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper extends the traditional analysis of the output effect under monopoly (third-degree) price discrimination to a multimarket Cournot oligopoly. Under symmetric Cournot oligopoly (all firms selling in all markets) similar results to those under monopoly are obtained: in order for price discrimination to increase total output the demand and inverse demand of the strong market (the high price market) should be, as conjectured by Robinson (1933), more concave than the demand and inverse demand of the weak market (the low price one). When competitive pressure (measured by the number of firms) varies across markets the effect of price discrimination on total output crucially depends on what market, the strong or the weak, is more competitive.

Keywords: Third-Degree Price Discrimination; Output; Oligopoly; Welfare. (search for similar items in EconPapers)
JEL-codes: D43 D61 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
Date: 2017-07-13
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