Abstract This paper considers variants of a dynamic duopoly model where one firm has a stronger market position than its competitor. Consumers' past purchases may reveal their different valuations for the two firms' products. Price discrimination based on purchase histories tends to benefit consumers if it does not cause the weaker firm to exit; otherwise it can harm consumers. The effect of price discrimination also depends on firms' cost differences, market competitiveness, and consumers' time horizon. The stronger firm may price below cost in the presence of consumer switching costs, with the purpose and effect of eliminating competition. Show Journal Information The Journal of Industrial Economics was founded to promote and publish the analysis of modern industry and it has a truly international circulation and spread of contributors. It publishes innovative work on industrial organization, functioning of markets, behaviour of firms and policy. Using criteria such as frequency of citation and size of circulation, The Journal of Industrial Economics can rightfully claim to be a leading world journal in its specialist area. The Journal of Industrial Economics covers all areas of industrial economics including: organization of industry and applied oligopoly theory product differentiation and technical change theory of the firm and internal organization regulation, monopoly, merger and technology policy These subjects often draw on adjacent areas such as international economics, labour economics, and law. JSTOR provides a digital archive of the print version of The Journal of Industrial Economics. The electronic version of The Journal of Industrial Economics is available at http://www.interscience.wiley.com. Authorized users may be able to access the full text articles at this site. Publisher Information Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This item is part of a JSTOR Collection. Abstract We model firms as supplying utility directly to consumers. The equilibrium outcome of competition in utility space depends on the relationship π(u) between profit and average utility per consumer. Public policy constraints on the "deals" firms may offer affect equilibrium outcomes via their effect on π(u). From this perspective we examine the profit, utility, and welfare implications of price discrimination policies in an oligopolistic framework. We also show that an equilibrium outcome of competitive nonlinear pricing when consumers have private information about their tastes is for firms to offer efficient two-part tariffs. Journal Information The purpose of the RAND Journal of Economics, formerly the Bell Journal of Economics, is to support and encourage research in the behavior of regulated industries, the economic analysis of organizations, and more generally, applied microeconomics. Both theoretical and empirical manuscripts in economics and law are encouraged. Website: www.rje.org Publisher Information Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This item is part of a JSTOR Collection. Which of the following is not a condition for price discrimination?The correct answer is d. The seller must have zero fixed costs. A seller has to incur fixed costs irrespective of the quantity produced or sold. A seller cannot have zero fixed costs and hence, it is not a condition for price discrimination.
Which is not a necessary condition for a firm to engage in price discrimination of some degree?Answer and Explanation: The correct answer is (a). Firms facing a perfectly elastic demand curve is not a condition necessary for the success of price discrimination.
Which of the following is a condition of price discrimination?Price discrimination is possible under the following conditions: The seller must have some control over the supply of his product. Such monopoly power is necessary to discriminate the price. The seller should be able to divide the market into at least two sub-markets (or more).
What are the 3 types of price discrimination?Types of Price Discrimination
These degrees of price discrimination are also known as personalized pricing (1st-degree pricing), product versioning or menu pricing (2nd-degree pricing), and group pricing (3rd-degree pricing).
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Which of the following is not a condition for a firm to engage in price discrimination
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