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Journal of Industrial Organization Education

Open Access

Third-Degree Price Discrimination

Qihong Liu1 / Konstantinos Serfes2

1University of Oklahoma

2Drexel University

Citation Information: Journal of Industrial Organization Education. Volume 5, Issue 1, Pages 1–23, ISSN (Online) 1935-5041, DOI: 10.2202/1935-5041.1030, March 2011

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This lecture deals with third-degree price discrimination in both monopolistic and oligopolistic markets. The classical monopoly paradigm serves as a benchmark. Next, we move to an oligopoly setting, first with best-response symmetry, then with best-response asymmetry. We end with behavior-based price discrimination. This lecture targets advanced undergraduate and graduate students.

Keywords: third-degree price discrimination; best-response asymmetry; price discrimination by purchase history

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