Price Discrimination Based On Imperfect Information: Necessary and Sufficient Conditions
Review of Economic Studies
1982
Usually, the information a buyer requires in order to obtain the lowest price must be produced at a cost depending on the efficiency with which the buyers gather information. Thus, a suitable price dispersion enables a monopolist to split up the market to permit a more profitable price discrimination. In this paper, necessary and sufficient conditions for the existence of a non-trivial profit maximizing price dispersion are considered. Furthermore, the relationship between statistical properties of the set of consumers' characteristics and this existence problem are studied.
- DOI
- 10.2307/2297363
- Volume
- 49 (3)
- Pages
- 391
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