Technology Choice and Third Degree Price Discrimination in a Monopoly

Francisco Galera (), José Luis à Lvarez () and Juan Carlos Molero
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Francisco Galera: School of Economics and Business Administration, University of Navarra
José Luis à Lvarez: School of Economics and Business Administration, University of Navarra

No 15/12, Faculty Working Papers from School of Economics and Business Administration, University of Navarra

Abstract: This paper studies technology choice as a relevant aspect to be considered when analyzing price discrimination and welfare. Our results reinforce the traditional wisdom that an increase in output is a necessary condition for price discrimination to improve social welfare. But we also find that the positive output effect does not need to be as large as previously supposed since, under some conditions, the monopoly will move to a socially preferred technology only if third-degree price discrimination is allowed.

Keywords: monopoly; technology choice; third degree price discrimination (search for similar items in EconPapers)
JEL-codes: D42 L12 L13 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2012-10-14
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