THE WELFARE EFFECTS OF THIRD-DEGREE PRICE DISCRIMINATION IN A DIFFERENTIATED OLIGOPOLY.

This article examines the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently g...

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Publicado en:Economic Inquiry Vol. 52; no. 3; pp. 1231 - 1245
Autores principales: ADACHI, TAKANORI, MATSUSHIMA, NORIAKI
Formato: Artículo
Publicado: Wiley-Blackwell Jul2014
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: THE WELFARE EFFECTS OF THIRD-DEGREE PRICE DISCRIMINATION IN A DIFFERENTIATED OLIGOPOLY.
      aug:
        au:
          ADACHI, TAKANORI
          MATSUSHIMA, NORIAKI
        affil:
          Adachi: Associate Professor, School of Economics, Nagoya University, Chikusa, Nagoya 464 ‐ 8601, Japan. Phone 81 ‐ 52 ‐ 789 ‐ 5962, Fax 81 ‐ 52 ‐ 789 ‐ 5962
          Matsushima: Professor, Institute of Social and Economic Research, Osaka University, Ibaraki, Osaka 567 ‐ 0047, Japan. Phone 81 ‐ 6 ‐ 6879 ‐ 8571, Fax 81 ‐ 6 ‐ 6879 ‐ 8583
      su:
        Oligopolies
        Licenses
        Consumers
        Economic demand
        Mathematical models of economic competition
        Price discrimination
        Mathematical models
        Complementarity constraints (Mathematics)
      sug:
        subj:
          Oligopolies
          Licenses
          Consumers
          Economic demand
          Mathematical models of economic competition
          Price discrimination
          Mathematical models
          Complementarity constraints (Mathematics)
      ab: This article examines the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently greater in the 'strong' market (where the discriminatory price is higher than the uniform price) than in the 'weak' market (where it is lower). It is verified, however, that consumer surplus is never improved; social welfare improves solely owing to an increase in the firms' profits in the case of linear demands. ( JEL D43, L11, L13)
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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