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Contemporaneous Most-Favoured-Customer Pricing Policy vs. Price Discrimination in a Differentiated Product Duopoly Market

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Listed:
  • Amarjyoti Mahanta

    (Indian Institute of Technology, Guwahati)

Abstract

In this paper a third degree price discrimination is analyzed in a differentiated product duopoly market. The main question is whether both firms should engage in price discrimination. An asymmetric equilibrium is derived in which one firm engages in price discrimination while the other firm sets a uniform price in both markets. This is done through the adoption of contemporaneous most favoured customer clause.

Suggested Citation

  • Amarjyoti Mahanta, 2016. "Contemporaneous Most-Favoured-Customer Pricing Policy vs. Price Discrimination in a Differentiated Product Duopoly Market," Economics Bulletin, AccessEcon, vol. 36(1), pages 75-83.
    • Handle: RePEc:ebl:ecbull:eb-15-00566
    as

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    References listed on IDEAS

    as
    1. Krishnendu Ghosh Dastidar, 2006. "On Third‐Degree Price Discrimination In Oligopoly," Manchester School, University of Manchester, vol. 74(2), pages 231-249, March.
    2. Joanna Stavins, 2001. "Price Discrimination in the Airline Market: The Effect of Market Concentration," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 200-202, February.
    3. Takanori Adachi & Noriaki Matsushima, 2014. "The Welfare Effects Of Third-Degree Price Discrimination In A Differentiated Oligopoly," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1231-1244, July.
    4. Patrick J. DeGraba, 1987. "The Effects of Price Restrictions on Competition Between National and Local Firms," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 333-347, Autumn.
    5. Marcus Asplund & Rickard Eriksson & Niklas Strand, 2008. "Price Discrimination In Oligopoly: Evidence From Regional Newspapers," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 333-346, June.
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    More about this item

    Keywords

    Oligopoly Pricing; Price Discrimination.;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L0 - Industrial Organization - - General

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