Document Type
Discussion Paper
Publication Date
5-1-2020
CFDP Number
2234
CFDP Pages
6
Journal of Economic Literature (JEL) Code(s)
D41, D42, D43, D83
Abstract
We study price discrimination in a market in which two firms engage in Bertrand competition. Some consumers are contested by both firms, and other consumers are “captive” to one of the firms. The market can be divided into segments, which have different relative shares of captive and contested consumers. It is shown that the revenue-maximizing segmentation involves dividing the market into “nested” markets, where exactly one firm may have captive consumers.
Recommended Citation
Bergemann, Dirk; Brooks, Benjamin; and Morris, Stephen, "Competition and Public Information: A Note" (2020). Cowles Foundation Discussion Papers. 13.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/13