Business, Management and Accounting
4 years ago

Uniform pricing policy guarantees half of optimal monopoly profits in market segmentation.

1 view
Third-degree Price Discrimination Versus Uniform Pricing
Dirk Bergemann, Francisco Castro, Gabriel Y. Weintraub

Paper Summary

The article compares making everyone pay the same price with charging different prices to different groups. They found that using the same price for everyone can make half of the best possible profit. This is true for many different situations where prices can be changed. If the prices can't be changed in certain ways, the profit can be much lower.

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