Joan Robinson Was Almost Right: Output Under Third-Degree Price Discrimination

Aguirre, Iñaki

doi:10.2139/ssrn.1434865

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Joan Robinson Was Almost Right: Output Under Third-Degree Price Discrimination

22 Pages Posted: 8 Sep 2009 Last revised: 21 Sep 2016

See all articles by Iñaki Aguirre

Iñaki Aguirre

University of the Basque Country - Department of Foundations of Economic Analysis I; University of the Basque Country

Date Written: February 16, 2009

Abstract

In this paper, we show that in order for third-degree price discrimination to increase total output, the demands of the strong markets should be, as conjectured by Robinson (1933), more concave than the demands of the weak markets. By making the distinction between adjusted concavity of the inverse demand and adjusted concavity of the direct demand, we are able to state necessary conditions and sufficient conditions for third-degree price discrimination to increase total output.

Keywords: third-degree price discrimination, output, monopoly, welfare

JEL Classification: D42, L12, L13

Suggested Citation: Suggested Citation

Aguirre, Iñaki and Aguirre, Iñaki, Joan Robinson Was Almost Right: Output Under Third-Degree Price Discrimination (February 16, 2009). Available at SSRN: https://ssrn.com/abstract=1434865 or http://dx.doi.org/10.2139/ssrn.1434865