Social Efficiency of Entry in a Vertical Structure with Third Degree Price Discrimination-Reference-Cited by-同舟云学术

Social Efficiency of Entry in a Vertical Structure with Third Degree Price Discrimination

Published:2022-03-03 Issue:1 Volume:23 Page:223-243
ISSN:1935-1704
Container-title:The B.E. Journal of Theoretical Economics
language:en
Short-container-title:

Author:

Chen Junlin¹,Mukherjee Arijit²,Zeng Chenhang¹^ORCID

Affiliation:

1. Wenlan School of Business , Zhongnan University of Economics and Law , Wuhan , China

2. Nottingham University Business School , Nottingham , UK

Abstract

Abstract We study social efficiency of entry in the presence of downstream cost asymmetry and upstream price discrimination. We show that entry is excessive when the entrants are highly inefficient, and it is insufficient when either the entrants are efficient or their inefficiency is low. The results are in sharp contrast to the existing literature considering upstream uniform pricing (Cao, H., and L. F. S. Wang. 2020. “Social Efficiency of Entry in a Vertically Related Industry Revisited.” Economics Letters 129. Art. no. 109200), as discriminatory pricing alters the relative strengths of the business-stealing, business-creation and production-(in)efficiency effects.

Funder

The Humanity and Social Science Planning Foundation of the Ministry of Education of China

Publisher

Walter de Gruyter GmbH

Subject

General Economics, Econometrics and Finance

Link

https://www.degruyter.com/document/doi/10.1515/bejte-2021-0069/pdf

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