Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75283
Authors: 
Dertwinkel-Kalt, Markus
Haucap, Justus
Wey, Christian
Year of Publication: 
2013
Series/Report no.: 
DICE Discussion Paper 99
Abstract: 
Katz (1987), DeGraba (1990), and Yoshida (2000) have formulated theories that price discrimination bans in intermediary goods markets tend to have positive effects on allocative, dynamic and productive efficiency, respectively. We show that none of these results is robust vis-à-vis endogenous changes in downstream market structure. An upstream monopolist's ability to price discriminate can intensify competition through entry (by a technically inefficient entrant), resulting in socially preferable market outcomes. In contrast, discrimination bans tend to blockade entry of relatively inefficient firms , thereby strengthening downstream market concentration.
JEL: 
L13
D43
K31
ISBN: 
978-3-86304-098-7
Document Type: 
Working Paper

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