The Limits of Price Discrimination

S-Tier
Journal: American Economic Review
Year: 2015
Volume: 105
Issue: 3
Pages: 921-57

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different prices to different segments of the market, i.e., carry out "third degree price discrimination." We show that the segmentation and pricing induced by the additional information can achieve every combination of consumer and producer surplus such that: (i) consumer surplus is nonnegative, (ii) producer surplus is at least as high as profits under the uniform monopoly price, and (iii) total surplus does not exceed the surplus generated by efficient trade. (JEL D42, D83, L12)

Technical Details

RePEc Handle
repec:aea:aecrev:v:105:y:2015:i:3:p:921-57
Journal Field
General
Author Count
3
Added to Database
2026-01-24