Third-degree price discrimination versus uniform pricing

• 成果类型: Article
• 署名作者: Bergemann, Dirk; Castro, Francisco; Weintraub, Gabriel
• 署名单位: Yale University; University of California System; University of California Los Angeles; Stanford University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2021.11.008
• 发表日期: 2022
• 页码: 275-291
• 关键词: Third-degree price discrimination; Uniform price; approximation; Concave profit function; market segmentation

摘要

We compare the profit of the optimal third-degree price discrimination policy against a uniform pricing policy. A uniform pricing policy offers the same price to all segments of the market. Our main result establishes that for a broad class of third-degree price discrimination problems with concave profit functions (in the price space) and common support, a uniform price is guaranteed to achieve one half of the optimal monopoly profits. This profit bound holds for any number of segments and prices that the seller might use under third-degree price discrimination. We establish that these conditions are tight and that weakening either common support or concavity can lead to arbitrarily poor profit comparisons even for regular or monotone hazard rate distributions. (C) 2021 Elsevier Inc. All rights reserved.