The third-degree price discrimination theory charges a lower price to a more elastic demand. This paper unveils an … elasticity pricing … unpleasant result of such theory: the lower price comes with less quantity. This paper further reveals the true meaning of …

We investigate the welfare effects of third-degree price discrimination by a two-sided platform that enables … discrimination, the platform can condition its fee on sellers' type. In a model with linear demand on each side, we show that price … discrimination: (i) increases participation on both sides; (ii) enhances total welfare; (iii) may result in a strict Pareto …