Comments on: Price Discrimination � with respect to entertainment and drugs Blog, news, books Fri, 03 Feb 2017 16:59:00 +0000 hourly 1 By: Steve Dispensa Sun, 31 Oct 2004 14:52:44 +0000 Differential pricing seems like a win-win situation in lots of respects: the free-market zealots will have to like it on principle, in the sense that if this system works at all, it’s precisely because it’s the best thing for the market. The, er, more socially conscious crowd should like it because of its intrinsic ability to level the playing field.

I think Ottmar’s examples are all traditional market economy examples, and don’t really illustrate differential pricing, as I understand it. 1 & 2 are certainly scenarios that exist in the marketplace today, (largely) absent differential pricing.

Differential pricing is technically feasible in the digital world due to DRM, but absent complicated governmental involvement and intense worldwide cooperation, I don’t see it working particularly well for most classes of physical goods, due specifically to the arbitrage concerns you raise above. In fact, if it worked well for physical goods, it would seem to imply that DRM is less necessary. Try that argument with the MPAA.

By: Ottmar Liebert Sat, 30 Oct 2004 20:10:12 +0000 Thanks for your postings this week. Very thought provoking.
1. Kowing that recording acoustic music, for example, is much more costly than recording two turntables and a microphone – having differentiating price-structures makes sense to me – like magazines or wine…
2. The same seems true for different parts of the world. While $10 or even 15 for a CD seem reasonable in the USA or Europe it is unattainable in Africa or some Asian countries. This could possibly be solved with the price coming down as time passes. Meaning somebody in Africa might just have to wait until the price becomes more reasonable?
3. RE ACS: if a person wanted to listen to his music collection, and add nothing new, he nevertheless would have to pay an ACS tax on his mp3 player, yes? It would be impossible to create exceptions.