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University of Florida
Levin College of Law

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Friday, January 6, 2012

Welfare Effects of Third-Degree Price Discrimination: Ippolito Meets Schmalensee and Varian

Posted by D. Daniel Sokol

Inaki Aguirre (UPV/EHU) has written Welfare Effects of Third-Degree Price Discrimination: Ippolito Meets Schmalensee and Varian. ABSTRACT: Based on a pioneering work by Ippolito (1980) we construct a simple model wich allows the welfare effects of third-degree price discrimination to be well understood and explained. The decomposition of the change in welfare into a misallocation effect and an output effect has advantages over the well-established analysis by Schamalensee (1981) and Varian (1985). In particular, our approach provides a graphic analysis which clarifies the welfare analysis of third-degree price discrimination.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/01/welfare-effects-of-third-degree-price-discrimination-ippolito-meets-schmalensee-and-varian.html

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