Price discrimination and investment incentives

Alexei Alexandrov; Joyee Deb

We examine a model of suppliers selling to two segments of consumers, who have different preferences for quality (or some product characteristic). We show that if the firm is unable to price discriminate between the segments, then there is less investment in quality. We find that both consumer segments, and the society overall, may suffer if the firms are unable to price discriminate. We extend the model to duopoly competition, and find that our results still hold

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Year of publication:	2011
Authors:	Alexandrov, Alexei ; Deb, Joyee
Publisher:	Rochester, NY : Simon Graduate School of Business, Univ. of Rochester
Subject:	Preisdifferenzierung \| Price discrimination \| Soziale Wohlfahrtsfunktion \| Social welfare function \| Investitionsentscheidung \| Investment decision \| Produktqualität \| Product quality \| Unvollkommener Wettbewerb \| Imperfect competition \| Duopol \| Duopoly \| Arzneimittelmarkt \| Pharmaceutical market

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Extent:	Online-Ressource (PDF-Datei: 15 S., 361,43 KB)
Series:	Simon Business School working paper. - Rochester, NY : [Verlag nicht ermittelbar], ZDB-ID 2452756-7. - Vol. 11-13 Simon School Working Paper ; No. FR 11-13
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Systemvoraussetzungen: Acrobat Reader
Other identifiers:	10.2139/ssrn.1788769 [DOI]
Classification:	F13 - Commercial Policy; Protection; Promotion; Trade Negotiations ; L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts ; L13 - Oligopoly and Other Imperfect Markets ; D92 - Intertemporal Firm Choice and Growth, Investment, or Financing
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10009239968