Title
Bertrand competition with an asymmetric no-discrimination constraint Bertrand competition with an asymmetric no-discrimination constraint
Author
Faculty/Department
Faculty of Applied Economics
Publication type
report
Publication
Antwerp :UA, [*]
Subject
Economics
Source (series)
Research paper / UA, Faculty of Applied Economics ; 2012:006
Volume/pages
23 p.,
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
Abstract
We study the competitive and welfare consequences when only one …rm must commit to uniform pricing while the competitor’s pricing policy is left unconstrained. The asymmet- ric no-discrimination constraint prohibits both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We …nd that an asymmetric no-discrimination constraint only leads to higher pro…ts for the unconstrained …rm if the monopolistic segment is large enough. Therefore, a regulatory policy objective of encouraging entry is not served by an asymmetric no-discrimination constraint if the monopolistic segment is small. Only when the monop- olistic segment is small and rivalry exists in the competitive segment does the asymmetric no-discrimination constraint enhance welfare.
Full text (open access)
https://repository.uantwerpen.be/docman/irua/74b883/89030588.pdf
Handle