On the welfare effects of regulating the ...
Type de document :
Compte-rendu et recension critique d'ouvrage
Titre :
On the welfare effects of regulating the number of discriminatory prices
Auteur(s) :
Titre de la revue :
Research in Economics
Pagination :
588-607
Éditeur :
Elsevier
Date de publication :
2016-12
ISSN :
1090-9443
Mot(s)-clé(s) en anglais :
Monopoly
Linear demands
Incomplete price discrimination
Market segmentation
Regulation
Linear demands
Incomplete price discrimination
Market segmentation
Regulation
Discipline(s) HAL :
Sciences de l'Homme et Société/Economies et finances
Résumé en anglais : [en]
We consider a profit-maximizing monopolist that faces different markets while the number k of discriminatory prices is chosen by the regulator. Unlike the classical approach in which only the polar cases are considered, ...
Lire la suite >We consider a profit-maximizing monopolist that faces different markets while the number k of discriminatory prices is chosen by the regulator. Unlike the classical approach in which only the polar cases are considered, we explicitly analyze the case in which k is an integer between 1 and N. As a consequence, the monopolist׳s profit maximization program is a mixed-integer programming problem, the solution of which is called the optimal profit policy. Assuming that demands are linear, we show that the socially optimal number of discriminatory prices is never higher than a threshold , defined as the smallest integer such that all the markets are served. This result allows us to disentangle the good aspect of price discrimination from the bad one and this shows that regulating the number of discriminatory prices is welfare enhancing, compared to the classical approach. Further welfare results are derived when demands are parallel, and a discussion of the conditions under which regulating the market segmentation itself is socially worthwhile is also provided. Finally, we consider the case of three markets and derive sufficient conditions under which the socially optimal number of discriminatory prices is equal to two.Lire moins >
Lire la suite >We consider a profit-maximizing monopolist that faces different markets while the number k of discriminatory prices is chosen by the regulator. Unlike the classical approach in which only the polar cases are considered, we explicitly analyze the case in which k is an integer between 1 and N. As a consequence, the monopolist׳s profit maximization program is a mixed-integer programming problem, the solution of which is called the optimal profit policy. Assuming that demands are linear, we show that the socially optimal number of discriminatory prices is never higher than a threshold , defined as the smallest integer such that all the markets are served. This result allows us to disentangle the good aspect of price discrimination from the bad one and this shows that regulating the number of discriminatory prices is welfare enhancing, compared to the classical approach. Further welfare results are derived when demands are parallel, and a discussion of the conditions under which regulating the market segmentation itself is socially worthwhile is also provided. Finally, we consider the case of three markets and derive sufficient conditions under which the socially optimal number of discriminatory prices is equal to two.Lire moins >
Langue :
Anglais
Vulgarisation :
Non
Collections :
Source :