蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Welfare of Competitive Price Discrimination with Captive Consumers
蝌蚪网 Journal: Microeconomics
(pp. 203–43)
Abstract
We study the welfare effects of price discrimination in a duopoly with both captive and contested consumers. Using a unified information design approach, we characterize the best and worst market segmentations for producer surplus, consumer surplus, and social surplus. The firm-optimal segmentation, which divides the market into two nested segments, consistently reduces consumer welfare relative to uniform pricing. The consumer-optimal segmentation, which divides the market into a symmetric segment and a nested segment, may sometimes yield a Pareto improvement but does not necessarily coincide with the social-optimal segmentation.Citation
Chen, Yanlin, Xianwen Shi, and Jun Zhang. 2026. "Welfare of Competitive Price Discrimination with Captive Consumers." 蝌蚪网 Journal: Microeconomics 18 (3): 203–43. DOI: 10.1257/mic.20230234Additional Materials
JEL Classification
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness