Price Discrimination and Competition

Lars Stole

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Merger and Competition Analysis Consumer Market Behavior and Pricing Digital Platforms and Economics

Abstract

I am especially indebted to Mark Armstrong and Audris Wong for their many helpful comments and insights. Financial support received from the National Science Foundation, the University of Chicago, GSB, and from the CES. This chapter surveys the developments in price discrimination theory as it applies to imperfectly competitive markets. Broad themes and conclusions are discussed in the areas of first-, second- and thirddegree price discrimination, pricing under demand uncertainty, bundling, and behavior-based discrimination. JEL classifications: D400, L100, L400, L500 JEL key words: price discrimination, oligopoly, imperfect competition,

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