4 ms·
Because price discrimination is the producer's attempt to poach part of the consumer benefit of trade for themselves, to take more than their fair share of the
by logfromblammo 9y ago
Because price discrimination is the producer's attempt to poach part of the consumer benefit of trade for themselves, to take more than their fair share of the economic specialization. (To be explicit, "fair" is when the whole area below demand and above equilibrium price goes to the consumer, and the whole area above supply and below equilibrium price goes to the supplier.)
And it requires that suppliers be able to know or discern things about their customers. If it becomes too severe, then the consumers that were overcharged have an incentive to either deceive their suppliers (as in the article) or to discriminate in the same way for the good or service that they supply (such as by adding a 50% surcharge to whatever it is you sell, just for known Uber owners).
It is economically more efficient for suppliers to always sell at the same price for everyone, and to not know anything about the customer other than the color of their money, but that is not a Nash equilibrium. A supplier can always get ahead by discriminating, if everyone else is not. It is therefore beneficial to discourage the practice by statute or by social approbation.
Income tax is often progressive, but doesn't affect any one good or service in particular, beyond financial instruments. We basically charge richer people more to have a higher savings and investment rate.
And mostly, people don't want to have to haggle, use coupons, and read sale flyers every time they buy anything.