Economics, Econometrics and Finance
4 years ago

Third-degree price discrimination boosts welfare with output reduction in multiple firms.

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RePEc: Research Papers in Economics
Welfare and Output in Third-Degree Price Discrimination: a Note
Francisco Llorente Galera, JesÃos M. Zaratiegui

Paper Summary

The article shows that switching from one price for everyone to different prices for different groups can actually increase overall welfare, even if it means producing less.

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