产业经济学英文版课件：5-Price Discrimination

1、5-Price Discrimination1Price DiscriminationPrice Discrimination involves selling the same good at different prices. The purpose of price discrimination is to capture more surplus than is obtainable with linear uniform pricing. 2The Motive for Price Discrimination: Unexploited Surplus3Mechanisms for

2、Capturing Surplus1. Market Segmentation2. Two-Part Pricing3. Non-Linear Pricing4. Tying and Bundling5. Quality Discrimination4Necessary Conditions for Price DiscriminationMarket Power without it, the price of all units of all goods will be driven down to the level of costs by competition, and price

3、discrimination cannot arise.Arbitrageresale or arbitrage must be prevented. 5ArbitrageFirms can also adopt strategies that restrict the arbitrage possibilities of consumers. 1. Warranties. 2. High Transactions Costs. 3. Contractual Remedies. 4. Vertical Integration.5. Adulteration. 6. Legal Restrict

4、ions. 61. Warranties. Often manufacturers who practice international price discrimination try to prevent arbitrage by voiding warranties in countries where the good is not intended to be sold. This is exactly what happens in the case of gray markets for consumer durables, for example.72. High Transa

5、ctions Costs.Coupons enable stores to charge a higher price to these shoppers with high search costs also have a high value of time, and are unlikely to find clipping coupons economical. And a lower price to those willing to search more for lower prices, who also tend to have a low value of time and

6、 hence are willing to clip coupons. 82. High Transactions Costs.Coupons often limit purchases to “one per customer” to further restrict arbitrage.Setting up secondary markets either in coupons or in the coupon discounted goods would entail high transactions costs, so arbitrage is unlikely to be prof

7、itable.93. Contractual Remedies. The firm can impose contractual terms as part of the sale agreement whereby the purchaser agrees not to resell the good. Typically computer firms offer educational discounts to students and professors for software and hardware. In order to take advantage of the lower

8、 prices on campus, students and faculty typically have to agree not to resell for some period of time. The contractual agreement not to resell does not appear to be particularly effective, given the frequent advertisements in student newspapers offering to resell such equipment.104. Vertical Integra

9、tionAluminum had uses for which there were good substitutes, such as electric wires, and uses for which there were few substitutes, such as airframes. In order to price discriminate and prevent arbitrage, Alcoa integrated forward into wire production, so that high prices could be maintained for alum

10、inum supplied to airframe construction.11产业铝的需求弹性是否被美国铝业公司一体化厨具富有弹性是电缆（electric wires）富有弹性是汽车零部件富有弹性是钢铁缺乏弹性是飞机制造（airframes）缺乏弹性是5. Adulteration(掺杂)The plastic molding powder methyl methacrylate (MM) was sold to industrial users at 0.85 per pound and dental manufacturers at 22 per pound. When arbitra

11、gers began buying MM at the industrial price and reselling it to dental manufacturers, one of the suppliers, Rohm and Haas, considered mixing arsenic（砷）with the MM sold for industrial use so that it could not be used for dental work.Spring 2013Microeconomics-Lily12Types of Price DiscriminationOrigin

12、ated by Pigou, is based on the information available to the firm.In first-degree, or perfect, price discrimination , a firm has perfect information on the willingness to pay of each consumer. In second-degree price discrimination, a firm cannot identify the customers between whom it would like to di

13、scriminate. By the use of self-selection mechanisms, the firm may induce consumers to sort themselves in a way that allows additional surplus to be extracted.Third-degree price discrimination or market segmentation is when the firm is aware of differences in willingness to pay across groups, but not

14、 within a group. 13Figure Perfect Price Discrimination14Monopolist with Perfect Price DiscriminationProfitPrice0QuantityDemandMarginal costQuantity soldConsumer surplus and deadweight loss have both been converted into profit.Every consumer gets charged a different price - the highest price they are

15、 willing to pay - so in this special case, the demand curve is also MR!Marginal revenueFirst-degree price discrimination refers to a case where a monopolist can extract all the surplus from a heterogeneous set of consumers.Monopolist with Single PriceProfitPrice0QuantityDeadweightlossDemandMarginalr

16、evenueConsumersurplusQuantity soldMonopolypriceMarginal costThird-degree Price Discrimination If two or more markets can be separated, a firm may choose to set different prices in each submarket. The market segmentation can be geographic, such as country boundaries. The segmentation can be by custom

17、er characteristic.17Third-degree Price Discrimination 18Profits go up by charging different prices.The lower elasticity, the higher priceThe higher elasticity, the lower priceThird-degree Price Discrimination Spring 2013Microeconomics-Lily19Second-Degree Price DiscriminationThe firm fail to discrimi

18、nate directlyKnows that consumers differ in ways that are important to the firm Be unable to identify individual consumers The consumers then “self-select” by opting for different menu choices, and by their self-selection the monopolist is able to discriminate profitably between them. 20Non-linear P

19、ricing21TyingTying refers to a sellers conditioning the purchase of one product on the purchase of another. These examples are sometimes called “technological ties” because the manufacturer designs the technology to tie the two products together. Spring 2013Microeconomics-Lily22TyingThinkPad Noteboo

20、ks require expensive Battery made by the original manufacturer. Spring 2013Microeconomics-Lily23Bundling24Reservation PricesType 1Type 2A产品910B产品32A+B1212The Revenue of the CompanySeparate FeesBundlingReservation PricesType 1Type 2A产品910B产品0.52A+B9.512The Revenue of the CompanySeparate FeesBundlingB

21、undling refers to tying in fixed proportions.The greater the negative correlation of reservation prices, the more likely that bundling will be profitable.Quality DiscriminationA firm will try to reduce the quality of the lower-quality good (economy air service) so as to reduce the incentive of peopl

22、e with a high willingness to pay to switch from the high-quality good ( first class) when the firm increases its price.25Quality DiscriminationAn economy round-trip ticket from New York to Paris costs about $700. A first class ticket costs about $3,000. The price difference suggests that the seats should be “four times” as comfortable, which is unlikely. Thus, if we think of the good as being a “base quality unit o