Oligopoly price discrimination, competitive pressure and total output

Oligopoly price discrimination and resale price maintenance

Oligopoly price discrimination in the retail market prevents a manufacturer from inducing optimal retail margins through any wholesale price. This motivates the manufacturer to impose resale price maintenance. In a model of third-degree price discrimination by rival retailers, a retail price ceiling (or floor) enables the manufacturer to restore the first best. Imposing a fixed retail price is ...

Capacity Constaint, Price Discrimination, and Oligopoly

In the presence of market power in oligopolistic environment, price discrimination is a natural phenomenon. Surprisingly this setting has not been analyzed in depth in the literature. In contrast with existing literature, e.g., Hazledine (2006) and Kutlu (2009), we consider quantity setting games where …rms compete in two stages. In the …rst stage …rms decide on the choice of capacity and in th...

Competitive Targeted Advertising with Price Discrimination

Price Caps, Oligopoly, and Entry

This paper investigates the impact of price caps in oligopoly markets with endogenous entry. In the case of deterministic demand and constant marginal cost, reducing a price cap yields increased total output, consumer welfare, and total welfare. This result falls in line with classic results on price caps in monopoly markets, and with results in Earle, Schmedders and Tatur (2007) and Grimm and ...

Welfare and output in third-degree price discrimination: A note

In this note I provide examples to show that, contrary to what is widely believed, when changing from an uniform price to a third-degree price discrimination situation, an improvement in welfare is possible with output reduction, if there is more than one firm.