Price discrimination with strategic interaction effects. Recent work has extended the theory of
price discrimination to oligopolistic industries (Katz, 1984;Borenstein,1985;Holmes,1989;and
Corts,1998). Holmes( 1989) shows that under certain symmetrys assumptions,the unambiguous
prediction that discrimination will lead to higher profits extends to an oligopoly setting. Corts
(1998), however, points out that Holmes's symmetrys asumptions are not innocous. He derives
conditions under which price discrimination may lead to lower profits and, more important for
our purposes,to lower prices for all consumers