Econ crew once more...price discrimination

dpakman91 · 12-10-2007, 05:48 PM

Can anyone suggest a couple of strong pro-comptetitive examples of price discrimination that I could discuss?

WickedLou9 · 12-10-2007, 05:59 PM

Do you mean like auto insurance companies charging men more than women?

dpakman91 · 12-10-2007, 06:04 PM

Originally Posted by WickedLou9

Do you mean like auto insurance companies charging men more than women?

hmm, not so much. more like this:

Price Discrimination in Monopoly

Ardentfrost · 12-10-2007, 06:32 PM

There are literally THOUSANDS AND THOUSANDS AND THOUSANDS of examples of second degree price discrimination. It has to do with how it's produced and packaged, it's actually cheaper for the factory to produce and sell and package in bulk.

Third degree would be like, an ISP charging on bandwidth. Comcast, for instance, has the normal 6 MB/s bandwidth, but for more money you can go up to 10 or whatever. There is a separate demand for that level of bandwidth entirely.

First degree is tough to come up with an example. Maybe just anything that can be haggled, like the price of a used car (or even new car).

WickedLou9 · 12-10-2007, 06:41 PM

I bet 1st degree happens with car dealers. There is always price haggling there. well maybe not always, but it's frequent.

dpakman91 · 12-10-2007, 11:47 PM

guys, i KNOW what price discrimination is and thousands of examples. my question is about some specific examples where it is PRO competitive rather than anti-competitive or at the expense of the consumer.

Phantom · 12-11-2007, 08:22 AM

Are you thinking of something like bulk discounts - lower prices for higher volume?

I could see this as being considered pro-competitive, but I can make just as strong an argument that this would be taking advantage of market share or simply dumping, depending on the firm's place in the market.

It seems to me any price discrimination could be painted as anti-competitive. The distinction would lie in how broad one wants to define "anti-competitive"

WickedLou9 · 12-11-2007, 08:59 AM

As far as 1st degree price discrimination I can't think of any examples that would be good for the consumer, unless there was some company that provided assistance to low income customers, perhaps for some necessity good like heating oil or food.

Dylith · 12-11-2007, 06:26 PM

real life examples of perfect price discrimination? There are none that I can think of.

Price discrimination in general though; how about specialty stores? There is a billard and sporting good store in my town that I use to work for. They carry sporting goods. They are the only sporting good store in town and thus can afford to charge higher prices locally for their products. They also have an online store and sell on ebay. Due to increased competition on ebay they sell their products on ebay for less than they do in shop.

How about air lines? They sell the same product but for different prices to different people (depending on when you purchase the ticket).

RMNIXON · 12-11-2007, 08:59 PM

I have noticed Gas Prices are a bit more in some higher income areas of So Cal. This may be something the owners do and not the Big Bad corporate Oil Companies, but I did take notice.

dpakman91 · 12-12-2007, 11:25 AM

Originally Posted by Dylith

real life examples of perfect price discrimination? There are none that I can think of.

Price discrimination in general though; how about specialty stores? There is a billard and sporting good store in my town that I use to work for. They carry sporting goods. They are the only sporting good store in town and thus can afford to charge higher prices locally for their products. They also have an online store and sell on ebay. Due to increased competition on ebay they sell their products on ebay for less than they do in shop.

How about air lines? They sell the same product but for different prices to different people (depending on when you purchase the ticket).

Examples of pro-competitive price discrimination. not perfect. anyway i already figured this out...toll roads are one example, and special mortgage programs for first time low income home buyers.

WickedLou9 · 12-12-2007, 01:19 PM

Originally Posted by dpakman91

Examples of pro-competitive price discrimination. not perfect. anyway i already figured this out...toll roads are one example, and special mortgage programs for first time low income home buyers.

aren't both of those things government sponsored? Certainly toll roads are. Most of those special loans for low income people are backed by the FHLMC. Or FNMA. or GNMA. I'm not sure. Point being, it almost becomes an issue of policy rather than economics when the government does it as opposed to free market forces.