Author: Kenneth Stevens Corts
Publisher:
ISBN:
Category :
Languages : en
Pages : 31
Book Description
Price discrimination by imperfectly competitive firms may intensify competition, leading to lower prices for all consumers; the trade-off of consumer groups' welfare that is characteristic of monopolistic discrimination need not arise. This escalation of competition may make firms worse off, and as a result firms may wish to avoid the discriminatory outcome. Under conditions similar to those in which unambiguous price and welfare effects may arise, unilateral commitments not to price discriminate - including the adoption of every day low-pricing or no-haggle policies - may raise firm profits by softening price competition.