The marginal price effects of antitrust rules against price discrimination

• Published in: Economics letters Vol. 117; no. 3; pp. 921 - 923
• Main Author: Zenger, Hans
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.12.2012
• Subjects: Antitrust pricing rules; Cost function; Marginal utility; Non-linear pricing; Personalized pricing; Price discrimination; Pricing; Personalized pricing; Antitrust pricing rules; L1; K2; L4; Non-linear pricing; Price discrimination

The two central pricing rules contained in most antitrust laws are prohibitions of below-cost pricing and prohibitions of discriminatory pricing. This article shows that the rule against discriminatory pricing may actually induce firms to charge exclusionary below-cost prices, even in the complete a...