Pharmaceutical Price Discrimination and Social Welfare

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Lichtenberg, Frank R (2010) Pharmaceutical Price Discrimination and Social Welfare. Capitalism and Society, 5 (1). pp. 1-29. ISSN 1932-0213

Abstract

Price discrimination is an extremely common type of pricing strategy engaged in by virtually every business with some discretionary pricing power. The issue of whether price discrimination reduces or increases social welfare has been considered by economists since at least 1920. At that time, it was demonstrated that, under certain (restrictive) conditions, price discrimination will reduce social welfare. Subsequent research has shown that price discrimination can increase social welfare, and that a necessary (but not a sufficient) condition for welfare to rise is that total output with discrimination exceeds the no-discrimination level.

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Item type Article
URI https://vuir.vu.edu.au/id/eprint/6976
DOI https://doi.org/10.2202/1932-0213.1066,
Official URL http://www.degruyter.com/view/j/cas.2010.5.1/cas.2...
Subjects Historical > FOR Classification > 1402 Applied Economics
Historical > SEO Classification > 9402 Government and Politics
Historical > Faculty/School/Research Centre/Department > Centre for Strategic Economic Studies (CSES)
Keywords ResPubID20935, pharmaceutical prices, price discrimination, social welfare
Citations in Scopus 8 - View on Scopus
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