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Iñaki Aguirre
''Output and misallocation effects in monopolistic third-degree price discrimination''
( 2008, Vol. 4 No.11 )
This paper shows how the welfare effects of third-degree price discrimination may be decomposed into two effects: a misallocation effect and an output effect. It also presents a geometrical analysis which shows how the welfare properties of third-degree price discrimination must be assessed using nonlinear demands, and hence how linear demands are not suitable for the analysis.
Keywords: Welfare
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Apr 21 2008 Manuscript Accepted : Apr 23 2008

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