Is price discrimination really illegal? If so, why can airlines, hotels,
car rental companies, etc. change their prices from hour to hour,
even minute to minute? A couple of years back, Coca-Cola was
looking into a soft-drink vending machine that monitored outdoor
temperatures and adjusted prices accordingly.
Ellen
[EMAIL PROTECTED] writes:
>Nonsense. The higher price paid by and to scalpers reflects price
>discrimination. It is only the few hardcore fans or people who need to
>buy
>tickets on short notice that are willing pay the higher price. In theory,
>ticket agencies could also reap these extra profits by charging a
>different
>price to every consumer according to indvidual willingness-to-pay, but -
>1]
>blatant price discrimination is illegal, 2] they lack the informational
>mechanisim to determine individual willingness to pay. Scalpers are able
>to
>determine the latter through the extra-legal channel of selling hot
>tickets
>at the venue where those with the highest willingness to pay are likely to
>show up. This is so Econ 1 it is hard to believe your professor is
>serious.
>But this probably only reflects the poverty of academic economics when it
>comes to even elementary considerations of real market behavior.
>
>By the way, I wouldn't be surprised is ticket agencies aren't trying to
>figure out ways to increase their ability to exercise price discrimination
>by collecting or purchasing information on individual performance tastes
>via
>internet consumer surveys.
>
>-----Original Message-----
>From: Andrew Hagen [mailto:[EMAIL PROTECTED]]
>Sent: Monday, March 19, 2001 7:34 PM
>To: [EMAIL PROTECTED]
>Subject: [PEN-L:9166] maximization?
>
>
>A professor of mine started class today with an interesting question:
>why don't ticketing companies raise prices to the level that the market
>will bear? Often these companies hold a monopoly in selling tickets to
>all events at a particular venue. Currently the event ticket market can
>bear higher prices, as evinced by the higher prices paid to scalpers,
>AKA the secondary market. It's apparent that raising prices would
>maximize profits in the primary ticket market. Why don't they do so? My
>professor's proposed answer was: companies do not want to maximize
>their profits; they only want what they perceive as a reasonable return
>on their investment. It seems to me like a plausible assertion.
>
>Could someone point me toward an article or book that questions the
>maximization assumption?
>
>Thanks,
>
>Andrew Hagen
>[EMAIL PROTECTED]
>
