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Price discrimination is when you charge different amounts for the same thing to different customers. And usually the difference in those prices are not made app

Price discrimination is when you charge different amounts for the same thing to different customers. And usually the difference in those prices are not made apparent. Like when travel websites quote iOS users more than Android because they generally can afford to pay more. This is just regular ole pricing.

thayne 2y ago
So what is the correct term for "charge an extremely high markup for a feature that some, but not all, of your customers need"?
- spondylosaurus 2y ago
  Price gouging?
- jchanimal 2y ago
  I came here to say the same thing. When you’re selling cloud services, the hardest thing to do is segment your customers by willingness to pay. Cross AZ traffic is exactly the sort of thing companies with budgets need, that small projects don’t.
- mcmcmc 2y ago
  Supply and demand
hansvm 2y ago
It's a bit of a mix, but price discrimination isn't far off. It's like the SSO tax; all organizations are paying for effectively the same service, but the provider has found a minor way to cripple the service that selectively targets people who can afford to pay more. If we want to call this just regular ole pricing, it's not a leap to call most textbook cases of price discrimination "regular ole pricing" as well. An online game charges more if your IP is from a certain geography? That's not discrimination; we've simply priced the product differently if you live in Silicon Valley; don't buy it it you don't want it.
- hipadev23 2y ago
  https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination Price discrimination has a clear definition. It’s not illegal in the US (when consumers are the victims anyway) but it has a clear meaning and you’re blurring the lines for I’m not sure what reason. Your example of a video game doing regional pricing is a perfect example of textbook price discrimination. Pricing a good or service at a level that inherently excludes those unwilling or unable to pay is: https://en.wikipedia.org/wiki/Excludability https://en.wikipedia.org/wiki/Excludability
  - hansvm 2y ago
    Alright, let's take a look at that first link as if it's gospel. AWS charging excessively for inter-AZ networking is: 1. a microeconomic pricing strategy 2. where largely similar goods (AWS with or without substantial inter-AZ bandwidth) 3. are sold at different prices (excessive inter-AZ networking fees) to different buyers 4. based on perceived market segments (most customers don't need (or don't know they need till they're locked in) much inter-AZ bandwidth, but larger, richer corporations likely do) I'm not trying to blur the lines. On top of any juggling of our favorite sources of definitions, that particular pricing strategy has all the qualitative hallmarks of price discrimination. Everyone still buys AWS, most customers are unaffected by the lack of bulk inter-AZ bandwidth, and AWS can successfully charge much more to those who can afford to pay.
  - thayne 2y ago
    > Price discrimination ("differential pricing",[1][2] "equity pricing", "preferential pricing",[3] "dual pricing",[4] "tiered pricing",[5] and "surveillance pricing"[6]) is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider to different buyers based on which market segment they are perceived to be part of. That sounds exactly like what is happening here. Intra-zone and inter-zone network traffic are two very similar services. One is free and one costs 1¢ per GB. And customers who need inter-az traffic are probably in a different market segment. Now, it is more expensive for AWS to build the infrastructure for inter-zone networking, so it isn't exclusively price discrimination, but assuming that getting more money from wealthier clients was a motivation, it seems to match the definition to me. Re: excludability, yes it is excludable since there is a price, but that doesn't have much to do with how the price is much higher than the cost to AWS for providing the service.

thayne 2y ago

So what is the correct term for "charge an extremely high markup for a feature that some, but not all, of your customers need"?

spondylosaurus 2y ago
Price gouging?
jchanimal 2y ago
I came here to say the same thing. When you’re selling cloud services, the hardest thing to do is segment your customers by willingness to pay. Cross AZ traffic is exactly the sort of thing companies with budgets need, that small projects don’t.
mcmcmc 2y ago
Supply and demand

hansvm 2y ago

It's a bit of a mix, but price discrimination isn't far off. It's like the SSO tax; all organizations are paying for effectively the same service, but the provider has found a minor way to cripple the service that selectively targets people who can afford to pay more. If we want to call this just regular ole pricing, it's not a leap to call most textbook cases of price discrimination "regular ole pricing" as well. An online game charges more if your IP is from a certain geography? That's not discrimination; we've simply priced the product differently if you live in Silicon Valley; don't buy it it you don't want it.

hipadev23 2y ago
https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination Price discrimination has a clear definition. It’s not illegal in the US (when consumers are the victims anyway) but it has a clear meaning and you’re blurring the lines for I’m not sure what reason. Your example of a video game doing regional pricing is a perfect example of textbook price discrimination. Pricing a good or service at a level that inherently excludes those unwilling or unable to pay is: https://en.wikipedia.org/wiki/Excludability https://en.wikipedia.org/wiki/Excludability
- hansvm 2y ago
  Alright, let's take a look at that first link as if it's gospel. AWS charging excessively for inter-AZ networking is: 1. a microeconomic pricing strategy 2. where largely similar goods (AWS with or without substantial inter-AZ bandwidth) 3. are sold at different prices (excessive inter-AZ networking fees) to different buyers 4. based on perceived market segments (most customers don't need (or don't know they need till they're locked in) much inter-AZ bandwidth, but larger, richer corporations likely do) I'm not trying to blur the lines. On top of any juggling of our favorite sources of definitions, that particular pricing strategy has all the qualitative hallmarks of price discrimination. Everyone still buys AWS, most customers are unaffected by the lack of bulk inter-AZ bandwidth, and AWS can successfully charge much more to those who can afford to pay.
- thayne 2y ago
  > Price discrimination ("differential pricing",[1][2] "equity pricing", "preferential pricing",[3] "dual pricing",[4] "tiered pricing",[5] and "surveillance pricing"[6]) is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider to different buyers based on which market segment they are perceived to be part of. That sounds exactly like what is happening here. Intra-zone and inter-zone network traffic are two very similar services. One is free and one costs 1¢ per GB. And customers who need inter-az traffic are probably in a different market segment. Now, it is more expensive for AWS to build the infrastructure for inter-zone networking, so it isn't exclusively price discrimination, but assuming that getting more money from wealthier clients was a motivation, it seems to match the definition to me. Re: excludability, yes it is excludable since there is a price, but that doesn't have much to do with how the price is much higher than the cost to AWS for providing the service.