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Author: Takanori Adachi Publisher: Springer Nature ISBN: 981993205X Category : Business & Economics Languages : en Pages : 85
Book Description
This book provides an updated overview of the recent progress in the theoretical study of third-degree price discrimination. It is a marketing tactic and is said to be present if the unit price is different across different groups of buyers. Its welfare evaluation is often difficult because it entails two countervailing effects: on one hand, it exploits surplus from consumers who have high willingness-to-pay, but on the other hand, it generates gains from trade from consumers who otherwise would not purchase the good. Recognizing this difficulty, we provide new insights on evaluation of third-degree price discrimination in consideration of network effects and vertical product differentiation. Our analysis is particularly useful for the industries related to information and communication technologies (ICT) because these two elements characterize them. Furthermore, we also study the welfare effects of third-degree price discrimination under imperfect competition other than monopoly. At first, it seems that it may complicate the analysis under monopoly. However, we argue that the main thrusts of analysis under monopoly carry over to the case of oligopoly. We also take into account behavioral aspects and their implications for studying third-degree price discrimination. Overall, this book is designed to provide implications for contemporary management and policy issues by advancing theoretical issues in industrial organization.
Author: Takanori Adachi Publisher: Springer Nature ISBN: 981993205X Category : Business & Economics Languages : en Pages : 85
Book Description
This book provides an updated overview of the recent progress in the theoretical study of third-degree price discrimination. It is a marketing tactic and is said to be present if the unit price is different across different groups of buyers. Its welfare evaluation is often difficult because it entails two countervailing effects: on one hand, it exploits surplus from consumers who have high willingness-to-pay, but on the other hand, it generates gains from trade from consumers who otherwise would not purchase the good. Recognizing this difficulty, we provide new insights on evaluation of third-degree price discrimination in consideration of network effects and vertical product differentiation. Our analysis is particularly useful for the industries related to information and communication technologies (ICT) because these two elements characterize them. Furthermore, we also study the welfare effects of third-degree price discrimination under imperfect competition other than monopoly. At first, it seems that it may complicate the analysis under monopoly. However, we argue that the main thrusts of analysis under monopoly carry over to the case of oligopoly. We also take into account behavioral aspects and their implications for studying third-degree price discrimination. Overall, this book is designed to provide implications for contemporary management and policy issues by advancing theoretical issues in industrial organization.
Author: Edward J. Lopez Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
Applied work in price discrimination often treats demand curves among multiple market segments as algebraically additive. Yet the welfare effects of multi-market (third degree) price discrimination depend on the method by which demand segments are added. Treating demands as geometrically additive yields the well known result that discrimination absent an increase in production diminishes Marshallian surplus. But if demands are treated as algebraically additive then discrimination increases welfare relative to uniform pricing. Quantity is identical in the three cases, so the effect is not due to market opening. Nor is the effect due to scale economies since marginal cost is assumed constant. Profit is always greater under discrimination, so the effect is due to distributional changes in consumer surplus. The model is restricted to linear demands and constant marginal cost but can be generalized for future work and policy analysis.
Author: Richard Schmalensee Publisher: North Holland ISBN: Category : Business & Economics Languages : en Pages : 1002
Book Description
Determinants of firm and market organization; Analysis of market behavior; Empirical methods and results; International issues and comparision; government intervention in the Marketplace.
Author: Youngsun Kwon Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper solves a simple model of third-degree price discrimination assuming two independent linear demands and discusses the effects of price discrimination on monopoly profit, consumer surplus, and social welfare. In addition, using a simple model, this paper shows that the probability that price discrimination raises social welfare increases as the preferences or incomes of consumer groups become more heterogeneous. The virtual aggregated demand curve of the price-discriminating monopoly, corresponding to its aggregated marginal revenue curve, is derived. The curve is non-linear and lies above the aggregated demand curve of simple monopoly. The results of this paper may be used to explain to students the effects of third-degree price discrimination on market outcomes.
Author: Sylvain Weber Publisher: ISBN: Category : Languages : en Pages : 14
Book Description
The objective of this paper is to assess how the marginal revenue of a monopoly should be plotted when the market is segmented between consumers with different demands, both in the discriminating and non-discriminating cases. The presentations offered by industrial organization textbooks concerning third-degree price discrimination are not always clear, and we believe this is due to the fact that the marginal revenue is different for both types of monopolies, even though the demands they face are absolutely identical. The quantity produced in equilibrium can therefore diverge significantly if price discrimination is feasible or not. Under certain circumstances, price discrimination may improve the situation of every market agent, producer as well as consumers.
Author: Federal Trade Commission Publisher: Createspace Independent Pub ISBN: 9781502751782 Category : Social Science Languages : en Pages : 32
Book Description
This book examines the welfare effects of third degree price discrimination by an intermediate good monopolist selling to downstream firms with bargaining power. One of the downstream firms (the "chain store") may have a greater ability than rivals to integrate backward into the supply of the input. In addition to this outside option, the firms' relative bargaining powers depend on their disagreement profits, bargaining weights, and concession costs. If the chain's integration threat is not a credible outside option, and if downstream firms cannot coordinate their bargaining strategies, then price discrimination reduces input prices to all downstream firms.
Author: Takanori Adachi
Author: Takanori Adachi
Author: David Arthur Malueg
Author: Edward J. Lopez
Author: Richard Schmalensee
Author: Youngsun Kwon
Author: Sylvain Weber
Author: Federal Trade Commission
Author: Daniel P. O'Brien
Author: David Arthur Malueg
Author: Dirk Bergemann