Professor Zhang Jianhu’s Co-authored Paper Published in International Journal of Industrial Organization (IJIO)

Recently, the academic paper The Welfare Effects of Input Price Discrimination Revisited, completed by Professor Zhang Jianhu from the School of Economics as the corresponding author, was published online in International Journal of Industrial Organization (IJIO), one of the top journals in industrial organization theory. The co-author is Professor Li Youping from the School of Business, East China University of Science and Technology.

The use of collected data for price discrimination by enterprises has always been the focus of policy makers, especially the antitrust authorities attach great importance to price discrimination in the intermediate goods market. For example, the U.S. Robinson-Patman Act and China’s Anti-Monopoly Law clearly prohibit upstream enterprises from engaging in price discrimination in the intermediate goods market. Therefore, analyzing the welfare effect of price discrimination in the intermediate goods market has important policy implications. Similarly, it is also a classic theoretical issue in the field of industrial organization theory, so scholars have studied it very early (such as Katz, 1987, AER). However, previous studies can only draw some "local" conclusions by using specific functions (such as linear demand function) or imposing strong restrictive conditions. The contribution of this paper is to skillfully find a method to "connect" the equilibrium results in the two scenarios of with and without price discrimination. This method can not only obtain existing conclusions, but also characterize the conditions under which intermediate goods price discrimination reduces or increases social welfare in detail under the assumption of general demand function. Especially when downstream enterprises are not very different, this study can even characterize the sufficient and necessary conditions for price discrimination to affect social welfare. Therefore, this research not only solves the classic problem of the welfare effect of price discrimination in the intermediate goods market in industrial organization theory, but also provides a more comprehensive and in-depth insight for policy makers.

Zhang Jianhu is a Professor at the School of Economics, Shandong University. His research interests include platform competition, R&D competition, data elements and other industrial organization theory issues. He has published more than 20 academic papers in domestic and foreign journals such as International Journal of Industrial Organization, Oxford Economic Papers, Journal of Public Economic Theory, and Economic Research (Quarterly), and successively presided over three National Natural Science Foundation projects related to the digital economy.