FrançaisEnglish

Érudit | Dépôt de documents >
CIRPÉE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi >
Cahiers de recherche du CIRPÉE >

Please use this identifier to cite or link to this item:

https://depot.erudit.org//id/003838dd

Title: When (not) to Segment Markets
Authors: Gendron-Saulnier, Catherine
Santugini, Marc
Keywords: Market integration
Market segmentation
Learning
Monopoly
Profits
Noisy signaling
Third-degree price discrimination
Issue Date: 2013-09
Series/Report no.: Cahiers du CIRPÉE;13-35
Abstract: A monopoly decides whether to segment two separate markets. Demand depends on stochastic shocks ad some buyers are uninformed about the quality of the good. Contrary to the case of complete information, we show that it is not always more profitable for the firm to segment the markets in an environment in which some buyers have incomplete information. The reason is that the presence of uninformed buyers provides the firm with the incentive to engage in noisy price-signaling. Indeed, if the benefit from price flexibility (through market segmentation) is offset by the cost of signaling quality through two distinct prices, then it is optimal not to segment the markets and to use uniform pricing.
URI: https://depot.erudit.org/id/003838dd
Appears in Collections:Cahiers de recherche du CIRPÉE

Files in This Item:

CIRPEE13-35.pdf, (Adobe PDF ; 353.95 kB)

Items in the Repository are protected by copyright, with all rights reserved, unless otherwise indicated.

 

About Érudit | Subscriptions | RSS | Terms of Use | Contact us |

Consortium Érudit ©  2016