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Monopoly, price discrimination, and rent-seeking

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Abstract

This paper considers the effect of rent-seeking on the welfare implications of price discrimination by a monopolist. It is shown that even when rent-seeking fully dissipates monopoly profits, it is possible for price discrimination to raise social welfare. Thus, the recognition that monopoly profits attract resource using, socially wasteful activities, does not necessarily negate price discrimination as a defence of monopoly.

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Authors and Affiliations

  1. Department of Economics, Bar-Ilan University, 52 100, Ramat Gan, Israel

    Nava Kahana

  2. Department of Economics, York University, Toronto, Canada

    Eliakim Katz

Authors
  1. Nava Kahana
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  2. Eliakim Katz
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Kahana, N., Katz, E. Monopoly, price discrimination, and rent-seeking. Public Choice 64, 93–100 (1990). https://doi.org/10.1007/BF00125919

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