This paper studies technology choice as a relevant aspect to be considered when analyzing price discrimination and welfare. Our results reinforce the traditional wisdom that an increase in output is a necessary condition for price discrimination to improve social welfare. But we also find that...

In the presence of a non-constant marginal cost and demand uncertainty, we show that an output increase is no longer a necessary condition for welfare to increase following the introduction of third-degree price discrimination. We thus highlight the existence of an effect that might offset the...

Nalebuff (Journal of Economic Perspectives, 1(2), 157-63, 1987) proposes a puzzle and a standard solution to the mentioned puzzle based on Bayes theorem. After giving the standard solution to this problem, Professor Nalebuff asked: 'Since many if not most individuals choose to stay with their...

We provide an example of a monopoly with Pigouvian second-degree price discrimination where unit taxes are Pareto superior to ad valorem taxes.

It has been proved that in an homogeneous product industry, price over marginal costs, business stealing, set up costs and free entry imply excess entry from the welfare point of view. The proof assumes identical firms. We show by example that with non-identical firms, those conditions are...

This paper compares the effects of unitary and ad valorem taxes in a homogeneous good market where two technologies are freely available. We find that, both in monopolies and Cournot oligopolies, unit taxes may be welfare superior to ad valorem taxes.