Redistribution Through Market Segmentation
Theoretical Economics
2026-05-14 v6
Abstract
We study how to optimally segment monopolistic markets with a redistributive objective. We characterize optimal redistributive segmentations and show that they (i) induce the seller to price progressively, i.e., charge richer consumers higher prices than poorer ones, and (ii) may not maximize consumer surplus, instead granting extra profits to the monopolist. We further show that optimal redistributive segmentations are implementable via price-based regulation.
Cite
@article{arxiv.2406.14174,
title = {Redistribution Through Market Segmentation},
author = {Victor Augias and Alexis Ghersengorin and Daniel M. A. Barreto},
journal= {arXiv preprint arXiv:2406.14174},
year = {2026}
}