Economics Unit 4: Price discrimination Rudolf Winter-Ebmer Johannes Kepler University Linz Winter Term 2012 Managerial Economics: Unit 4 - Price discrimination 1 / 39 OBJECTIVES Objectives ◮ Explain how managers use price discrimination to increase profits ⋆ ⋆ Identify submarkets with different price elasticities of demand Segment the market and charge different prices to consumers in each submarket Managerial Economics: Unit 4 - Price discrimination 2 / 39 MOTIVATION
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Price Discrimination Online: Hollywood Goes to the Web One of the most significant characteristics of the internet is that technology on the web allows for the collection of consumer behavior, attitudes, and profiles. When customers create profiles and make online purchases, behavior patterns and preferences are stored in customer databases, later analyzed to tailor specific services and products that match the customer profile best. The emergence of internet movie downloads will allow the industry
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Price Discrimination Price discrimination exists when sales of identical goods or services are transacted at different prices from the same provider. In a theoretical market with perfect information, no transaction costs or prohibition on secondary exchange (or re-selling) to prevent arbitrage, price discrimination can only be a feature of monopoly markets. Otherwise, the moment the seller tries to sell the same good at different prices, the buyer at the lower price can arbitrage by selling
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management” or “revenue management.” Meaning prices on the same plane can fluctuate widely based on available seats at the time of purchase. Even though this seems to defy logic (and textbook theory), there might just be a method, an algorithm, to the madness. In a perfectly competitive market, companies would have no power to discriminate by price. Price discrimination means that one is charging different prices to different consumers, whereby price cannot be explained by the differences in cost
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Price Discrimination | | Most businesses charge different prices to different groups of consumers for what is more or less the same good or service! This is price discrimination and it has become widespread in nearly every market. This note looks at variations of price discrimination and evaluates who gains and who loses?What is price discrimination?Price discrimination or yield management occurs when a firm charges a different price to different groups of consumers for an identical good or
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Privacy, Economics, and Price Discrimination on the Internet [Extended Abstract] Andrew Odlyzko Digital Technology Center, University of Minnesota 499 Walter Library, 117 Pleasant St. SE Minneapolis, MN 55455, USA odlyzko@umn.edu http://www.dtc.umn.edu/∼odlyzko Revised version, July 27, 2003 Abstract. The rapid erosion of privacy poses numerous puzzles. Why is it occurring, and why do people care about it? This paper proposes an explanation for many of these puzzles in terms of the increasing
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PRICE DISCRIMINATION Submitted By: S Date Abstract The aim of this research was to investigate the consumer’s buying behavior related to product differentiation. The report is comprised of three sections. The first section contains the introduction and background about the topic chosen is Product differentiation, the second sections contains the source of reports i.e. from where the data is collected and the last section belongs to the analysis, statistics and summary of the survey
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Pricing Discrimination by Amazon.com The Internet allows shoppers to easily compare prices across thousands of stores. But it also enables businesses to collect detailed information about a customer's purchasing history, preferences, and financial resources and to set prices accordingly. So when you buy an airplane ticket or a DVD online, you may pay a higher or lower price than another customer buying the very same item from the very same site. In September 2000, Amazon.com reportedly outraged
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principles Price discrimination Outline 1. Introduction............................................................................................................................3 2. Conditions for price discrimination........................................................................................3 3. Types of discrimination..........................................................................................................4 4. Advantages/Disadvantages of price discrimination....
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Price discrimination is essentially a difference of price for the same product. Generally, Price discrimination refers to the situation where provider of goods or services implements a different sales price or charge standard for different recipients of same level and same quality of goods or services. Operators have no reasonable grounds for providing a different price of the same kind of goods or services to the buyers under the same conditions; this constitutes price discrimination. Price discrimination
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