Abstract

http://ssrn.com/abstract=1996428
 


 



Bertrand Competition with an Asymmetric No-Discrimination Constraint


Jan Bouckaert


University of Antwerp - Department of Economics

Hans Degryse


KU Leuven, Department Accounting, Finance and Insurance; Centre for Economic Policy Research (CEPR)

Theon Van Dijk


Lexonomics

January 18, 2012


Abstract:     
We study the competitive and welfare consequences when only one …firm must commit to uniform pricing while the competitor's pricing policy is left unconstrained. The asymmetric no-discrimination constraint prohibits both behavior-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We …find that an asymmetric no-discrimination constraint only leads to higher profi…ts for the unconstrained …firm 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 monopolistic segment is small and rivalry exists in the competitive segment does the asymmetric no-discrimination constraint enhance welfare.

Number of Pages in PDF File: 24

JEL Classification: D11

working papers series





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Date posted: February 1, 2012  

Suggested Citation

Bouckaert, Jan and Degryse, Hans and Dijk, Theon van, Bertrand Competition with an Asymmetric No-Discrimination Constraint (January 18, 2012). Available at SSRN: http://ssrn.com/abstract=1996428 or http://dx.doi.org/10.2139/ssrn.1996428

Contact Information

Jan Bouckaert (Contact Author)
University of Antwerp - Department of Economics ( email )
Prinsstraat 13
Antwerp, B-2000
Belgium
+32 3 220 4055 (Phone)
Hans Degryse
KU Leuven, Department Accounting, Finance and Insurance ( email )
Naamsestraat 69
Leuven, B-3000
Belgium
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Theon Van Dijk
Lexonomics ( email )
Grensstraat 81
Brussels, 1970
Belgium
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