Monopoly Price Discrimination and Demand Curvature

Iñaki Aguirre, Simon Cowan and John Vickers.
American Economic Review 100 (September 2010): 1601–1615.

This paper presents a general analysis of the effects of monopolistic third-degree price discrimination on welfare and output when all markets are served.Sufficient conditions—involving straightforward comparisons of the curvaturesof the direct and inverse demand functions in the different markets—are presented for discrimination to have negative or positive effects on social welfareand output. (JEL D42)

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