DETERMINANTS OF PRICE DISCRIMINATION INFLUENCE VECTOR ON PUBLIC WELFARE

Анотація

The article considers the nature of price discrimination, defined by different researchers. It mainly relates to strategic behaviour of firms that sell the same product to different consumers at different prices. On the one hand, it leads to redistribution of consumer surplus to producer that reduces a public welfare, being a negative consequence of price discrimination. On another hand, the price discrimination provides access of low-income people to a product. It is the way for them to buy it at a reduced price, and this is a positive consequence of price discrimination on public welfare. The article depicts positive effects of price discrimination with examples of banking (deposit rates), cosmetics (season tickets) and education markets (tuition fee). These markets are distinguish by dispersed structure that is favoured for competition. Negative effects in the article are depicted with example of glucose syrup market, marked with a dominance. These examples, as well as the results of theoretical research, witness that a market structure is one of the determinants of a vector of price discrimination influence on public welfare. Another determinant (behavioural) is defined by Pike – Shastitko criteria, among which are: exploitation of a dominance, distorting of competition on the downstream markets (leverage of dominance), and reducing of the potential competition. Considering of the above-mentioned structural and behavioural determinants of the vector of price discrimination influence on public welfare asks for relevant legal reflection within the system of state regulation of price discrimination. The authors analyse the current Ukrainian legal framework of price discrimination regulation, highlighting the gaps which are still exist, determining mostly negative effects of price discrimination influence on the public welfare of Ukrainians. They develop the recommendation of how to do balance its negative and positive effects through change of legislation, in particular, the introduction of certain requirements for exemption from competition law, starting from the foreign, mainly American, experience.

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