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A GUIDE TO THE PITFALLS OF IDENTIFYING PRICE DISCRIMINATION
Author(s) -
Lott John R.,
Roberts Russell D.
Publication year - 1991
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1991.tb01249.x
Subject(s) - ticket , collusion , ignorance , economics , price discrimination , microeconomics , advertising , financial economics , business , computer science , philosophy , epistemology , computer security
This paper demonstrates that plausible cost‐based explanations exist for what are commonly perceived to be cases of price discrimination. We explain such commonly discussed problems as the price spreads of retail gasoline products, the “high” price of dinners at restaurants, the “high” price of popcorn at movie theaters, and the fact that airline ticket prices vary with how long the ticket is purchased before the flight's departure. Our explanations benefit from not relying on consumer ignorance or implicit collusion among numerous sellers.