Market power, price discrimination, and allocative efficiency in intermediate-goods markets.: An article from: The Rand Journal of Economics (Blackwell)
Book Details
Author(s)Roman Inderst, Greg Shaffer
PublisherBlackwell Publishers Ltd.
ISBN / ASINB002ZBAXZ4
ISBN-13978B002ZBAXZ0
MarketplaceCanada 🇨🇦
Description
This digital document is an article from The Rand Journal of Economics (Blackwell), published by Blackwell Publishers Ltd. on December 22, 2009. The length of the article is 11097 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.
From the author: We consider a monopolistic supplier's optimal choice of two-part tariff contracts when downstream firms are asymmetric. We find that the optimal discriminatory contracts amplify differences in downstream firms' competitiveness. Firms that are larger--either because they are more efficient or because they sell a superior product--obtain a lower wholesale price than their rivals. This increases allocative efficiency by favoring the more productive firms. In contrast, we show that a ban on price discrimination reduces allocative efficiency and can lead to higher wholesale prices for all firms. As a result, consumer surplus, industry profits, and welfare are lower.
Citation Details
Title: Market power, price discrimination, and allocative efficiency in intermediate-goods markets.
Author: Roman Inderst
Publication:The Rand Journal of Economics (Blackwell) (Magazine/Journal)
Date: December 22, 2009
Publisher: Blackwell Publishers Ltd.
Volume: 40 Issue: 4 Page: 658(15)
Distributed by Gale, a part of Cengage Learning
From the author: We consider a monopolistic supplier's optimal choice of two-part tariff contracts when downstream firms are asymmetric. We find that the optimal discriminatory contracts amplify differences in downstream firms' competitiveness. Firms that are larger--either because they are more efficient or because they sell a superior product--obtain a lower wholesale price than their rivals. This increases allocative efficiency by favoring the more productive firms. In contrast, we show that a ban on price discrimination reduces allocative efficiency and can lead to higher wholesale prices for all firms. As a result, consumer surplus, industry profits, and welfare are lower.
Citation Details
Title: Market power, price discrimination, and allocative efficiency in intermediate-goods markets.
Author: Roman Inderst
Publication:The Rand Journal of Economics (Blackwell) (Magazine/Journal)
Date: December 22, 2009
Publisher: Blackwell Publishers Ltd.
Volume: 40 Issue: 4 Page: 658(15)
Distributed by Gale, a part of Cengage Learning
