Input price discrimination in the presence of downstream vertical differentiation
| Autor: | Duarte Brito, Markos Tselekounis, Helder Vasconcelos |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Upstream (petroleum industry)
Economics and Econometrics Uniform pricing media_common.quotation_subject 05 social sciences Price discrimination Vertical differentiation Competition (economics) Microeconomics Downstream (manufacturing) 0502 economics and business Economics Quality (business) 050207 economics Finance 050205 econometrics media_common |
| Zdroj: | Economics Letters. 184:108622 |
| ISSN: | 0165-1765 |
| DOI: | 10.1016/j.econlet.2019.108622 |
| Popis: | This paper investigates the competitive effects of input price discrimination (IPD) in a setting in which an upstream monopolist produces an essential input supplied to the downstream market where there is competition between two vertically differentiated retailers. Two different input pricing regimes are investigated: ( i ) the uniform pricing regime, in which third-degree input price discrimination is prohibited; and ( i i ) a discriminatory pricing regime, under which the upstream monopolist may charge different prices to the two downstream firms. We find that despite favoring the low-quality firm, IPD is welfare enhancing if and only if the quality gap is sufficiently high. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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