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Price Discrimination

Tim Harford, author of The Logic of Life and The Undercover Economist, explains price discrimination with the example of the secret cappuccino. Can you explain what the secret cappuccino is and why it illustrates price discrimination? What other examples does Harford give?

Here is an video illustrating price discrimination done by some students. Its production values leave a lot to be desired, and partly for that reason it is quite humorous. Can you think of other examples of price discrimination that they might have used?

You might think that this CBS report about bartering should belong in a discussion of money. However, is what is happening here really bartering, or is it using an alternative medium of exchange? Why would vendors use this market rather than sell to the general public? Can you make sense of what is happening here if you use the concept of price discrimination?

See also the videos about price discrimination here.

Regulation: The Evidence

Here are three videos that present evidence that government regulation is often sought by those who want to limit competitors. How effectively do they argue the case?

These links were checked on December 14, 2009.
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Copyright Robert Schenk