第25章讲义.ppt

Chapter Twenty-Five Monopoly Behavior 垄断行为 How Should a Monopoly Price? So far a monopoly has been thought of as a firm which has to sell its product at the same price to every customer. This is uniform pricing. Can price-discrimination （差别定价）earn a monopoly higher profits? Structure First-degree price discrimination Second-degree price discrimination Third-degree price discrimination Bundling Two-part tariff Types of Price Discrimination 1st-degree: Each output unit is sold at a different price. Prices may differ across buyers. 2nd-degree: The price paid by a buyer can vary with the quantity demanded by the buyer. But all customers face the same price schedule. E.g. bulk-buying discounts. Types of Price Discrimination 3rd-degree: Price paid by buyers in a given group is the same for all units purchased. But price may differ across buyer groups.E.g., senior citizen and student discounts vs. no discounts for middle-aged persons. First-degree Price Discrimination Each output unit is sold at a different price. Price may differ across buyers. It requires that the monopolist can discover the buyer with the highest valuation of its product, the buyer with the next highest valuation, and so on. First-degree Price Discrimination First-degree Price Discrimination First-degree Price Discrimination First-degree Price Discrimination First-degree Price Discrimination First-degree Price Discrimination First-degree Price Discrimination First-degree price discrimination gives a monopolist all of the possible gains-to-trade, leaves the buyers with zero surplus, and supplies the efficient amount of output. Examples of 1st-degree Price Discrimination Auction of antique Car sales Financial aid in universities May not be practical do not know willingness to pay too costly Second-degree Price Discrimination Non-linear pricing Unit price depends on quantity purchased Bulk discount Setting A seller does not know the willingness to pay by each individual buyer Consumer’s margin