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Second-Degree Price Discrimination: A Graphical and Mathematical Approach

Author

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  • Chemi Gotlibovski
  • Nava Kahana

Abstract

The authors use a relatively simple diagram accompanied by mathematical analysis to compare two pricing strategies: price-quantity packages and a two-part tariff. This is done both from the monopolist's point of view and from the welfare point of view. The authors show that in the case of two consumer types, the price-quantity packages strategy dominates two-part tariff pricing from the monopolist's point of view. However, social welfare may be higher under two-part tariff pricing.

Suggested Citation

  • Chemi Gotlibovski & Nava Kahana, 2009. "Second-Degree Price Discrimination: A Graphical and Mathematical Approach," The Journal of Economic Education, Taylor & Francis Journals, vol. 40(1), pages 68-79, January.
    • Handle: RePEc:taf:jeduce:v:40:y:2009:i:1:p:68-79
    DOI: 10.3200/JECE.40.1.068-079
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    Cited by:

    1. Juan Pablo Herrera Saavedra & Jacobo Campo Robledo & Natalia Cantor Vargas & Jenny-Paola Lis-Gutiérrez, 2013. "Una propuesta metodológica de discriminación de segundo grado: el caso de tarifas multiclase para el registro marcario en Colombia durante el ano 2012," Estudios Económicos SIC 10746, Superintendencia de Industria y Comercio.
    2. Brendan Cushing-Daniels, 2020. "Rethinking Profit-Maximization in Second-Degree Price Discriminating Markets," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(2), pages 223-235, June.
    3. Juan Pablo Herrera Saavedra & Natalia Cantor Vargas & Jenny Paola Lis Gutiérrez & Jacobo Alberto Campo Robledo, 2014. "Discriminación de precios de segundo grado: el caso de tarifas multi-clase para el registro marcario en Colombia," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, vol. 0(1), pages 63-78, June.

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