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ON THIRD‐DEGREE PRICE DISCRIMINATION IN OLIGOPOLY *
Author(s) -
DASTIDAR KRISHNENDU GHOSH
Publication year - 2006
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2006.00490.x
Subject(s) - duopoly , monopoly , price discrimination , economics , oligopoly , microeconomics , profit (economics) , welfare , limit price , price level , monetary economics , cournot competition , market economy
In this paper we analyse the effects of third‐degree price discrimination on output, profit and welfare in a symmetric cost duopoly. We provide sufficient conditions for output, profit and welfare to be higher (or lower) under third‐degree price discrimination in a duopoly, compared with a uniform price regime. Comparing our findings with the traditional results on monopoly price discrimination, we show that the output and profit effects under duopoly price discrimination are very different from those under the monopoly case. However, the welfare effects are very similar.