Partial price discrimination by an upstream monopolist

We analyze third degree price discrimination by an upstream monopolist to a continuum of heterogeneous downstream firms. The novelty of our approach is to recognize that customizing prices may be costly. As a consequence, partial price discrimination arises in equilibrium; in particular,we showthat inefficient downstream firms receive personalized prices whereas efficient firms are charged a uniform price. The extreme cases of complete price discrimination and uniform price arise in our setting as particular cases, depending on the cost of customizing prices.

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Year of publication:	2011
Authors:	Bru, Lluís ; Faulí-Oller, Ramon ; Sandonís, Joel
Published in:	SERIEs - Journal of the Spanish Economic Association. - Heidelberg : Springer, ISSN 1869-4195. - Vol. 2.2011, 2, p. 217-231
Publisher:	Heidelberg : Springer
Subject:	Preisdifferenzierung \| Monopol \| Theorie \| price discrimination \| input markets

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Type of publication:	Article
Type of publication (narrower categories):	Article
Language:	English
Other identifiers:	10.1007/s13209-010-0030-7 [DOI] 671694820 [GVK] hdl:10419/77802 [Handle]
Classification:	D4 - Market Structure and Pricing ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L12 - Monopoly; Monopolization Strategies
Source:	EconStor

Persistent link: https://www.econbiz.de/10010317142