An Integrated Approach to Teaching
Price Discrimination
Ann Marsden and Hugh Sibly
Abstract
Textbooks present the three ‘degrees’ of price discrimination as a sequence of independent pricing
methods and consequently provide inadequate insight as to when a...
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An Integrated Approach to Teaching
Price Discrimination
Ann Marsden and Hugh Sibly
Abstract
Textbooks present the three ‘degrees’ of price discrimination as a sequence of independent pricing
methods and consequently provide inadequate insight as to when a firm might adopt a particular
pricing strategy.
The paper describes a taxonomy of the various mechanisms of price discrimination,
which can be used to teach monopolistic price discrimination in an integrated way.
The pricing
strategy adopted by firms is based on (i) the information on consumer demand available to it and
(ii) whether the firm has the ability to conduct non-linear pricing.
The paper proposes a method for
ranking profit and efficiency levels under different price discrimination strategies.
The proposed
taxonomy is compared to the existing textbook approach.
JEL classification: A20, A22, L11, L12
1.
Introduction
Students observe price discrimination in their daily life.
They could, for example, purchase bus
tickets
Less
