Differential pricing when costs differ: a welfare analysis.

This article analyzes the welfare effects of monopoly differential pricing in the important, but largely neglected, case where costs of service differ across consumer groups. Cost-based differential pricing is shown to increase total welfare and consumer welfare relative to uniform pricing for broad...

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Publicado en:RAND Journal of Economics (Wiley-Blackwell) Vol. 46; no. 2; pp. 442 - 461
Autores principales: Chen, Yongmin, Schwartz, Marius
Formato: Artículo
Publicado: Wiley-Blackwell Summer2015
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Differential pricing when costs differ: a welfare analysis.
      aug:
        au:
          Chen, Yongmin
          Schwartz, Marius
        affil:
          University of Colorado, Boulder
          Georgetown University
      su:
        Consumer behavior
        Economic demand
        Resource allocation
        Pricing
        Price discrimination
      sug:
        subj:
          Consumer behavior
          Economic demand
          Resource allocation
          Pricing
          Price discrimination
      ab: This article analyzes the welfare effects of monopoly differential pricing in the important, but largely neglected, case where costs of service differ across consumer groups. Cost-based differential pricing is shown to increase total welfare and consumer welfare relative to uniform pricing for broad classes of demand functions, even when total output falls or the output allocation between consumers worsens. We discuss why cost-based differential pricing tends to be more beneficial for consumers than its demand-based counterpart, third-degree price discrimination. We also provide sufficient conditions for welfare-improving differential pricing when costs and demands differ across consumer groups.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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