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On the output criterion for price discrimination

Author

Listed:
  • Paolo Bertoletti

    (Pavia University and IEFE, Bocconi University)

Abstract

We argue that the output criterion for price discrimination is not robust to the introduction of even arbitrarily small marginal cost differences. However, welfare improvements can be validly assessed by replacing it with the computation of well-known price indexes which are not informatively more demanding.

Suggested Citation

  • Paolo Bertoletti, 2009. "On the output criterion for price discrimination," Economics Bulletin, AccessEcon, vol. 29(4), pages 2951-2956.
    • Handle: RePEc:ebl:ecbull:eb-09-00616
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    References listed on IDEAS

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    1. repec:ebl:ecbull:v:4:y:2006:i:23:p:1-6 is not listed on IDEAS
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    9. Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, vol. 75(4), pages 870-875, September.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Aguirre Pérez, Iñaki, 2011. "Welfare Effects of Third-Degree Price Discrimination: Ippolito Meets Schmalensee and Varian," IKERLANAK 2011-54, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    2. Inaki Aguirre, 2012. "Welfare Effects of Third-Degree Price Discrimination: Ippolito Meets Schmalensee and Varian," Chapters, in: Rosario Laratta (ed.), Social Welfare, IntechOpen.
    3. Adachi, Takanori, 2023. "A sufficient statistics approach for welfare analysis of oligopolistic third‐degree price discrimination," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    4. Francisco Galera & Pedro Mendi & Juan Carlos Molero, 2017. "Seasonality, price discrimination, and welfare," Journal of Economics, Springer, vol. 120(3), pages 269-277, April.
    5. Aguirre Pérez, Iñaki, 2011. "Multimarket Competition and Welfare Effects of Price discrimination," IKERLANAK info:eu-repo/grantAgreeme, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    6. Youping Li, 2017. "Differential Pricing in Intermediate Good Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 585-596, September.
    7. Yongmin Chen & Marius Schwartz, 2015. "Differential pricing when costs differ: a welfare analysis," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 442-460, June.
    8. Takanori Adachi & Michal Fabinger, 2019. "Output and Welfare Implications of Oligopolistic Third-Degree Price Discrimination," Working Papers e139, Tokyo Center for Economic Research.
    9. Daniel Flores & Vitaliy Kalashnikov, 2017. "Parking Discounts: Price Discrimination with Different Marginal Costs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(1), pages 91-103, February.

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    More about this item

    Keywords

    third-degree price discrimination; uniform pricing; price indexes;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D1 - Microeconomics - - Household Behavior

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