On the Alignment of Consumer Surplus and Total Surplus under Competitive Price Discrimination

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2025
Volume: 17
Issue: 4
Pages: 234-59

Authors (3)

Dirk Bergemann (Yale University) Benjamin Brooks (not in RePEc) Stephen Morris (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

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

Abstract

We study the role of information in Bertrand competition with differentiated goods and heterogeneous production costs. When producers know their costs and consumers know their values, consumer surplus and total surplus are aligned, in the sense that the information and equilibrium that maximize consumer surplus also maximize total surplus. Alignment may fail if consumers do not know their values: Partial information about values makes purchases less efficient but intensifies price competition. We illustrate this within a Hotelling duopoly framework.

Technical Details

RePEc Handle
repec:aea:aejmic:v:17:y:2025:i:4:p:234-59
Journal Field
General
Author Count
3
Added to Database
2026-01-24