Recent Advances in the Theory of Third-Degree Price Discrimination: A Nexus to Network Effects, Innovation, and Behavioral Aspects

The book provides an updated overview of third-degree price discrimination, a marketing tactic with both positive and negative welfare effects. It explores network effects and vertical product differentiation, particularly relevant for industries related to information and communication technologies (ICT). It also studies the welfare effects of third-degree price discrimination under imperfect competition, arguing that the main thrusts of analysis under monopoly carry over to the case of oligopoly. Behavioral aspects are also considered, with implications for contemporary management and policy issues.

Format: Paperback / softback
Length: 73 pages
Publication date: 07 July 2023
Publisher: Springer Verlag, Singapore

This book offers a comprehensive update on the latest developments in the theoretical analysis of third-degree price discrimination, a marketing strategy that involves charging different prices to distinct groups of buyers. The evaluation of third-degree price discrimination is often challenging due to its dual impact: it exploits surplus from consumers with high willingness-to-pay while simultaneously generating gains from trade among consumers who would not purchase the good otherwise. Recognizing this complexity, the book presents novel insights into the evaluation of third-degree price discrimination, considering network effects and vertical product differentiation. The analysis is particularly relevant for industries related to information and communication technologies (ICT) as these two elements characterize them. Additionally, the book explores the welfare implications of third-degree price discrimination under imperfect competition, beyond the monopoly scenario. Initially, it may appear that analyzing third-degree price discrimination under oligopoly complicates the analysis compared to monopoly. However, the book argues that the main thrusts of analysis under monopoly carry over to the case of oligopoly. Furthermore, it considers behavioral aspects and their implications for studying third-degree price discrimination. Overall, the book aims to provide practical implications for contemporary management and policy issues by advancing theoretical issues in industrial organization.

Dimension: 235 x 155 (mm)
ISBN-13: 9789819932047
Edition number: 1st ed. 2023