How does price discrimination serve the public? I got the impression it’s the sort of drawback of markets that gets regulated away when it gets pronounced enough, like network effects.
I think there’s a good chance my answer might change if I thought about this more. But the underlying thought is that price discrimination gives consumers more choices.
Coupons are a real-world example of PD. Without them, consumers have two choices:
Consume at a higher price.
Forego consumption entirely.
With coupons, consumers have a third choice:
3. Consume at a lower price, in exchange for the fuss of keeping track of coupons.
More choice is good. Price discrimination allows people who’d otherwise be priced out of consumption to get more of what they want.
How does price discrimination serve the public? I got the impression it’s the sort of drawback of markets that gets regulated away when it gets pronounced enough, like network effects.
I think there’s a good chance my answer might change if I thought about this more. But the underlying thought is that price discrimination gives consumers more choices.
Coupons are a real-world example of PD. Without them, consumers have two choices:
Consume at a higher price.
Forego consumption entirely.
With coupons, consumers have a third choice:
3. Consume at a lower price, in exchange for the fuss of keeping track of coupons.
More choice is good. Price discrimination allows people who’d otherwise be priced out of consumption to get more of what they want.