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Redistribution Through Market Segmentation

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  • Victor Augias
  • Alexis Ghersengorin
  • Daniel M. A. Barreto

Abstract

We study how to optimally segment a monopolistic market given a redistributive objective. Optimal redistributive segmentations (i) induce the seller to price progressively, i.e., richer consumers pay higher prices than poorer ones, and (ii) may require giving a higher profit than uniform pricing if the redistributive motive is strong. We further show that optimal redistributive segmentations are implementable via price-based regulation.

Suggested Citation

  • Victor Augias & Alexis Ghersengorin & Daniel M. A. Barreto, 2024. "Redistribution Through Market Segmentation," Papers 2406.14174, arXiv.org, revised Oct 2024.
    • Handle: RePEc:arx:papers:2406.14174
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    File URL: http://arxiv.org/pdf/2406.14174
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