Price discrimination

Armstrong, Mark (2006): Price discrimination.

Abstract

This paper surveys recent economic research on price discrimination, both in monopoly and oligopoly markets. Topics include static and dynamic forms of price discrimination, and both final and input markets are considered. Potential antitrust aspects of price discrimination are highlighted throughout the paper. The paper argues that the informational requirements to make accurate policy are very great, and with most forms of price discrimination a laissez-faire policy may be the best available in practical terms. However, careful case-by-case analysis of situations involving selective price cuts and margin squeeze seems worthwhile.

• Item Type: MPRA Paper
• Institution: Department of Economics, University College London
• Language: English
• Keywords: Price discrimination; bundling; entry deterrence; competition policy
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets