Bertrand competition with an asymmetric no-discrimination constraint
Bouckaert,J.M.C. Degryse,H.A. van Dijk,T.
Bouckaert,J.M.C.
Degryse,H.A.
van Dijk,T.
Abstract
Regulators and competition authorities often prevent firms with significant market power, or dominant firms, from practicing price discrimination. The goal of such an asymmetric no-discrimination constraint is to encourage entry and serve consumers' interests. This constraint prohibits the firm with significant market power from practicing both behaviour-based price discrimination within the competitive segment and third-degree price discrimination across the monopolistic and competitive segments. We find that this constraint hinders entry and reduces welfare when the monopolistic segment is small.
Description
Appeared earlier as CentER Discussion Paper 2012-009
Date
2013
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Bouckaert, J M C, Degryse, H A & van Dijk, T 2013, 'Bertrand competition with an asymmetric no-discrimination constraint', Journal of Industrial Economics, vol. 61, no. 1, pp. 62-83. https://doi.org/10.1111/joie.12011