The welfare effects of third‐degree price discrimination in intermediate good markets: the case of bargaining
Year: 2014
Type: article
Abstract: This article examines the welfare effects of third‐degree price discrimination by a monopolist selling to downstream firms with bargaining power. One of the downstream firms (the “chain store”) can integrate backward at lower cost than rivals. Bargaining powers also depend on disagreement profits, bargaining weights, and concession costs. If the chain's integration threat is not credible, price discrimination reduces the input price charged symmetric downstream firms and often reduces the average input price charged asymmetric downstream firms.
Source: The RAND Journal of Economics
Author: Daniel P. O'Brien
Institution: Federal Trade Commission
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2129777530