Arbeitspapier
Third-degree Price Discrimination in the Presence of Congestion Externality
This paper analyzes third-degree price discrimination of a monopoly airline in the presence of congestion externality when all markets are served. The model features the business-passenger and leisure-passenger markets where business passengers exhibit a higher time valuation, and a less price-elastic demand, than leisure passengers. Our main result is the identification of the time-valuation effect of price discrimination, which can work in the opposite direction as the well-known output effect on welfare. This time-valuation effect clearly explains why discriminating prices can improve welfare even when this is associated with a reduction in aggregate output.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tinbergen Institute Discussion Paper ; No. 14-140/VIII
- Klassifikation
-
Wirtschaft
Market Structure, Pricing, and Design: Monopoly
Air Transportation
- Thema
-
Price discrimination
congestion
time valuation
monopoly
airline
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Czerny, Achim I.
Zhang, Anming
- Ereignis
-
Veröffentlichung
- (wer)
-
Tinbergen Institute
- (wo)
-
Amsterdam and Rotterdam
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Czerny, Achim I.
- Zhang, Anming
- Tinbergen Institute
Entstanden
- 2014
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