The paper analyzes the price, output and welfare effects of third-degree price discrimination triggered by the portfolio motive of a risk-averse monopolist facing random and potentially correlated market demands. It is shown that contrary to conventional wisdom, price discrimination can occur...

This note considers a bargaining environment with two-sided asymmetric information and quasilinear preferences in which parties select bargaining mechanism after learning their valuations. I demonstrate that sometimes the buyer achieves a higher ex-ante payoff if the bargaining mechanism is...