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Much Ado About Price Discrimination

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Abstract

Online selling technology raises the specter of widespread dynamic pricing, or price discrimination (PD). Articulating a widely held view, Paul Krugman writes, “[D]ynamic pricing is undeniably unfair: some people pay more just because of who they are.” Implicit in this view are two claims: (C1) PD is unfair because it violates the equal treatment norm; and (C2) equal treatment of buyers by sellers requires unitary pricing—the same price for one and all. These claims may be thought to underwrite a third: (C3) PD ought to be met with public policy initiatives deterring it. I argue that this view is mistaken: (1) On any reasonable concept of equal treatment, buyers are treated more equally under PD. (2) Although some public policy initiatives aim to deter PD; it is not because PD treats some buyers unfairly with respect to other buyers. (3) Despite emerging online selling technology, PD promises to be ephemeral.

Alexei M. Marcoux, "Much Ado About Price Discrimination," Journal of Markets & Morality 9, no. 1 (Spring 2006): 57-69


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