Monopoly Price Discrimination and Demand Curvature

Published as an article in: American Economic Review, 2010, vol. 100, issue 4, pages 1601-15.

This paper presents a general analysis of the effects of monopolistic third-degree price discrimination on welfare and oputput 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.