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Take education as another example Parents a and b are considering whether to enroll their children in a private school. Parent A lives in a nice neighborhood
by CameronNemo 6y ago
Take education as another example
Parents a and b are considering whether to enroll their children in a private school.
Parent A lives in a nice neighborhood that can lobby for better funding for public schools.
Parent B lives in a worse school district.
The private school realizes that parent B has worse options, and that they can upcharge parent B. The private school knows that at a certain price point parent A will simply decide to send their child to the high quality public school in their district, so they charge that parent less.
Parent B is disadvantaged because they have weaker bargaining power, and the price discrimination is simply exacerbating existing inequalities in the community.
I don't think that price discrimination is inherently unethical. But the criteria used to discriminate can certainly be unethical. Look up "reverse redlining" for example.
- munificent 6y agoAgain, schooling is another example that is already heavily morally loaded (the opportunity we pass on to our children may be the most important aspect of all of society) and where there is nothing even approximating an efficient market.
- CameronNemo 6y agoReverse redlining has to do with housing. That is a market with many buyers and sellers, relatively good information symmetry, etc.
- philwelch 6y agoExcept if you try and price gouge parent B, it doesn’t work because they’re poor. So instead you price gouge parent A because they are rich, by raising tuition and giving a charitable scholarship/discount/etc. to parent B.
- CameronNemo 6y agoWho said parent B has less money for education than parent B? I just said they live in a worse neighborhood for public schools.