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Publication Date:
December 2006
ISSN:
1935-1682
DOI:
10.2202/1538-0637.1647

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The B.E. Journal of Economic Analysis & Policy

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Ludwig, Sandra / Requate, Till / Schneider, Hilmar / Tsui, Kevin / Wichardt, Philipp

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A Simple Model of Entry That Increases Price Levels and Price Dispersion

Wen Zhou1

1Hong Kong University of Science and Technology, wzhou@business.hku.hk

Citation Information: Advances in Economic Analysis & Policy. Volume 6, Issue 1, Pages –, ISSN (Online) 1538-0637, DOI: 10.2202/1538-0637.1647, December 2006

Publication History:
Published Online:
2006-12-04

Abstract

A monopolist who originally charges a uniform price across all markets may switch to discriminatory pricing upon the entry of a competitor. As a result, intensified competition may lead to more dispersed prices as well as higher prices for some or all consumers.

Keywords: entry; price competition; price discrimination; price dispersion

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