The Economics of Price Discrimination

This book offers a theoretical and unified explanation of how prices are determined in practice. Pricing, as observed in real life, turns out to be almost discriminatory. Four broad areas are covered: the spatial pricing of bulky products (Part I); the intertemporal pricing of storable goods, exhaustible resources, new durables, and nonstorable goods and services (Part II); two-part tariffs, commodity bundling, tie-ins, and nonlinear prices in general (Part III); and pricing of goods of different quality (Part IV). Each essay contains an introductory chapter describing the business practices that are to be rationalized and evaluated. This is the first unified treatment of a recent and growing body of literature in the 'new industrial organization' field. It fills the gap between textbook microeconomics and real-life antitrust cases. The treatment is as nontechnical and down to earth as possible to permit a wide audience for this comprehensive discussion of industrial pricing.