Impact of Price Discrimination
价格歧视分析代写 It is my pressure to present to you the implications of third-degree price discrimination on production, efficiency, and social
It is my pressure to present to you the implications of third-degree price discrimination on production, efficiency, and social welfare based on theoretical models and real-world examples. The findings for this research will help in recommending policy measures. According to Miller (2014), the understanding of price discriminatin help expound on the legal and ethical issues surrounding it. The study of price discrimination assist in understanding consumer negotiation position and bargainng power in the market (Grennan, 2013).
Price discrimination is a common economic phenomenon in real business world to exploit the consumer surplus, and the third-degree price discrimination means that the company set different price for the same product in different markets considering the consumer characteristic. Price discrimination according to some researchers can provide benefits to consumers including lower prices, rewards for less popular products, assist the firm in staying profitable and in business. However, price discrimination can have negative implications on the social welfare, production and efficiency in the market as detailed by the scholarly findings.
Foremost, I must discuss the project plan to give a general overview of this research paper. 价格歧视分析代写
The main objective of this dissertation is to study third-degree price discrimination and its impact on production, efficiency, social welfare based on analysis of theoretical model and its application in real world, and lastly provide some policy suggestions. This research will add to the knowledge about the impact of price discrimination to the welfare of society and the influence of market demand and overall efficiency. The paper discusses how price discrimination impacts consumer surplus, social welfare and distribution. In support of the model, the paper used the US Airline case study on flight ticket pricing and shopping coupons as a marketing strategy and a form of social welfare. The model and cases helped in determining policy needs in price discrimination.
The literature review covers the various findings from scholars on how price discrimination has impacted social welfare, market efficiency and productivity of firms. There are two extreme perspectives on price discrimination. On one end is the positive relationship be Robinson (1969) and Pigou (1920) that argues price discrimination is based on strong and weak market. They agreed that price discrimination tends to be detrimental to social welfare in a linear demand curve as opposed to non-linear ones.
Furthermore, Schmalensee (1981) found that price discrimination can cause distribution inefficiency particularly in monopolistic market.
Other scholars (Holmes, 1989; Borenstein, 1985; Borenstein and Rose, 1994) pointed that third-degree price discrimination may hamper fair competition in the market where few firms tend to set unsustainable prices that are can be unprofitable to other firms and hence locking them out of the market. Overall, literature has revealed that price discrimination has both benefits and detriments to social welfare, production and market efficiency.
Therefore, the findings in this research have implications for businesses. They learn how to be profitable and avoid bankruptcy by charging different prices to turn a loss into a small profit. This helps firms to keep going rather than closing down. Most importantly, is the understanding of the social impact where some groups benefit from lower prices. Firms have incentive to cut prices for some groups that are sensitive to prices; that is, they have elastic demand. For instance, students have lower-income and have more elastic demand. The group is poorer than average consumer. At the same time, it informs on the detriments that price discrimination, if not controlled can bring to the economy especially where people's welfare is concerned.
其他学者（Holmes，1989； Borenstein，1985； Borenstein和Rose，1994）指出，三度价格歧视可能会阻碍市场上的公平竞争，因为市场上很少有公司倾向于设定不可持续的价格，而这些价格可能对其他公司无利可图，因此被锁定。他们退出市场。总体而言，文献表明，价格歧视对社会福利，生产和市场效率既有好处，也有不利影响。
Additionally, the firms learn the mechanisms to avoid congestion through production. 价格歧视分析代写
It is most effective in the airline business to prevent overcrowding during rush hours. Also, when low-income consumers are charged less through coupons for the same product in the market, it improves their welfare. In the case of airline firms, price discrimination helps the company remain or be more profitable.
However, it is generally accepted the downsides of third-degree price discrimination. When some groups are charged less there are others who pay extra to compensate for the lost profit margin and hence paying more. Notably, in the air travel, those who book ticket during pick times end up paying more than those booking during low times. The higher prices are likely to be allocative ineffective because P>MC.
Secondly, there is decline in consumer surplus in that price discrimination increases the transfer of money from consumers to firms and hence contributing to increased inequality. Thirdly, price discrimination has potential of creating unfairness in the market. It does not necessarily benefit the poorest through low prices. For instance, the adults paying for low price could be unemployed, and elderly but very well off. Finally, price discrimination can be misused through predatory pricing. As a result, some firms may lock others from the market to enjoy the monopoly. The increase in monopoly power reduces the welfare of the public due to higher prices in long term.
In summation, I would like to conclude the policy suggestions based on the findings of the research.
As such, price discrimination though has the negative side, will encourage the producers to expand sales and increase profits, then it could lead to increased government taxes. Therefore, market regulation policies should not hamper the mechanisms for price discrimination. However, due to its posing harm to the social welfare of the public, the government should device appropriate restrictions to control monopoly and few firms controlling the market.
因此，价格歧视虽然有不利的一面，但它会鼓励生产者扩大销售并增加利润，这可能导致政府税收增加。 因此，市场监管政策不应妨碍价格歧视机制。 但是，由于它危害公众的社会福利，政府应采取适当的限制措施来控制垄断，并且很少有公司控制市场。
Borenstein, S. (1985). Price Discrimination in Free-Entry Markets. RAND Journal of Economics, 16, pp. 380-97.
Borenstein, S. and Rose, N. (1994). Competition and Price Dispersion in the U.S. Airline Industry. Journal of Political Economy,102, pp. 653-683.
Grennan, M. (2013). Price discrimination and bargaining: Empirical evidence from medical devices. American Economic Review, 103(1), 145-77.
Holmes, T. J. (1989). The Effects of Third-Degree Price Discrimination in Oligopoly. American Economic Review, 79, pp. 244-250.
Miller, A. A. (2014). What Do We Worry about When We Worry about Price Discrimination-The Law and Ethics of Using Personal Information for Pricing. J. Tech. L. & Pol'y, 19, 41.
Pigou, A. C. (1920). The Economics of Welfare. Macmillan and Co., London.
Robinson, J. (1969). The Economics of Imperfect Competition. 2 and ed. Springer.
Schmalensee, R. (1981). Output and Welfare Implications of Monopolistic Third-Degree Price Discrimination. The American Economic Review, 71(1), pp. 242-247.
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