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Monopoly Price Discrimination and Demand Curvature

American Economic Review 2010 100(4), 1601-1615 open access
This paper presents a general analysis of the effects of monopolistic third-degree price discrimination on welfare and output when all markets are served. Sufficient conditions—involving straightforward comparisons of the curvatures of the direct and inverse demand functions in the different markets—are presented for discrimination to have negative or positive effects on social welfare and output.