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Price discrimination under online–offline competition

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  • Guo, Wen-Chung
  • Lai, Fu-Chuan

Abstract

Third-degree online price discrimination can improve welfare when the online–offline​ cross-demand parameter is large, even though the total outputs remain unchanged. However, if the online firm competes with a uniform-pricing chain store, online discrimination will reduce welfare. Extensive discussions on different slopes, a leader–follower game, and general multiple markets are provided.

Suggested Citation

  • Guo, Wen-Chung & Lai, Fu-Chuan, 2022. "Price discrimination under online–offline competition," Economics Letters, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:ecolet:v:216:y:2022:i:c:s0165176522001811
    DOI: 10.1016/j.econlet.2022.110602
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    References listed on IDEAS

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    Cited by:

    1. Shizhen Bai & Yun Xu & Hao He & Dingyao Yu, 2024. "Under the context of competition between platform sales and live streaming sales, who has the pricing power of products?," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-20, December.
    2. Bourreau, Marc & Manenti, Fabio M., 2023. "Selling cross-border in online markets: The impact of the ban on geoblocking strategies," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    3. Xubei Lian & Kai Zhang & Leonard F. S. Wang, 2023. "Managerial delegation, network externalities and loan commitment," Manchester School, University of Manchester, vol. 91(1), pages 37-54, January.
    4. Stefano Colombo, 2024. "Does online third-degree price discrimination improve welfare?," Economics Bulletin, AccessEcon, vol. 44(3), pages 1109-1112.

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    More about this item

    Keywords

    Online price discrimination; Online–offline competition; Local markets; Social welfare; Cross demand;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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