QUALITY DIFFERENCES, THIRD-DEGREE PRICE DISCRIMINATION, AND WELFARE.
We propose a model with two markets to analyze the welfare implications of price discrimination with quality differences. In each market a local firm that operates in that market only competes against a global firm that operates in both markets. Local firms produce higher-quality goods than the glob...
| Published in: | Economic Inquiry Vol. 55; no. 1; pp. 339 - 352 |
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| Main Authors: | , , |
| Format: | Article |
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Wiley-Blackwell
Jan2017
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=119533473&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 119533473 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Jan2017 vid: 55 iid: 1 pid: 480 pub: Wiley-Blackwell artinfo: ui: 119533473 10.1111/ecin.12368 ppf: 339 ppct: 13 formats: fmt: – @attributes: type: T – @attributes: type: P size: 290KB tig: atl: QUALITY DIFFERENCES, THIRD-DEGREE PRICE DISCRIMINATION, AND WELFARE. aug: au: Galera, Francisco Mendi, Pedro Molero, Juan Carlos affil: Associate Professor, Department of Economics, Universidad de Navarra, Pamplona 31009 Spain su: Public welfare Price discrimination Government pricing policy Market design & structure (Economics) Economic research sug: subj: Public welfare Research and Development in the Social Sciences and Humanities Health and Welfare Funds Other Individual and Family Services Emergency and Other Relief Services Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs) Price discrimination Government pricing policy Market design & structure (Economics) Economic research ab: We propose a model with two markets to analyze the welfare implications of price discrimination with quality differences. In each market a local firm that operates in that market only competes against a global firm that operates in both markets. Local firms produce higher-quality goods than the global firm. If the quality levels of the local firms' products are the same, price discrimination is never welfare-decreasing. If they differ, discrimination is welfare-increasing if quantity increases. Because of a positive allocation effect of price discrimination, there are parameter values such that welfare increases while total output decreases with price discrimination. ( JEL D43, D60) pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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