"Under certain conditions... Pay What You Like pricing could be more profitable than uniform pricing..." Pay What You Like pricing might even allow firms to ap

"Under certain conditions... Pay What You Like pricing could be more profitable than uniform pricing..." Pay What You Like pricing might even allow firms to approach a theoretical maximum (for profits). To maximize profits, a firm must employ what economists call price discrimination [http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination]: charging EACH customer the maximum that he/she would be willing to pay. Open-air PWYC theatre (like of Shakespeare in the Park) is a good example. Marginal costs are low: the cost of seating an extra customer is close to zero so it doesn't really matter if some customers only pay $1. Spirits are high (theatre-goers are generally in a good mood) so customers are inclined to be generous. Even frugal customers will probably pay a fair price (thanks to peer pressure & the fear of public embarrassment). I just wonder how PWYC pricing would have worked at Woodstock...