7 ms·

You're right, but the irony here is that perfect price discrimination (where the producer can costlessly and effortlessly force rich customers to pay P2) is the

You're right, but the irony here is that perfect price discrimination (where the producer can costlessly and effortlessly force rich customers to pay P2) is the best possible situation for the poor customers. This implies that relatively cheap ways of borking a product (make one chip, disable some features) can be better for low-end consumers than more expensive methods (such as actually running two production lines), even though it seems less fair.

AnthonyMouse 10y ago
> You're right, but the irony here is that perfect price discrimination (where the producer can costlessly and effortlessly force rich customers to pay P2) is the best possible situation for the poor customers. The poor consumer is agnostic to how much of the surplus is captured by the rich consumer vs. the producer. It's possible for that transaction to affect the poor consumer, e.g. if the producer gets it and spends it on R&D or the rich consumer gets it and spends it on some other public good, either of which could benefit the poor consumer. But either of them could also use it for something adverse to the poor consumer's interests, or just put the money in their pocket and walk away. And just because the producer is extracting as much as possible from the rich consumer doesn't mean it isn't also extracting as much as possible from the poor consumer -- doing that is the definition of perfect price discrimination.
deleted 10y ago
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