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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Zulehner, Christine / Schirle, Tammy

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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,

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

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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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