At 18:53 00-07-08, you wrote:

Is there any logic to whether restaraunts offer free refills for soda
drinks?
An hypothesis: Suppose there are two clienteles for restaurant sodas: one with a high elasticity of demand and a higher demand curve, and the other one with a low elasticity and a lower demand curve. A restaurant owner (and his competitors) cannot price discriminate -- if only because he is unable to differentiate the two types of clients when they walk into the shop -- so the same price is charged to everybody, but a rebate is given to the high-elasticity, high-demand customers in the form of a refill. I assume here that price discrimination would be feasible in this market even if there is no monopoly because   it could be enforced at a low cost in any restaurant.

Indeed, in non-American, non-soft-drink, cultures, refills seem to be unknown for, presumably, the high-demand clientèle does not exist.

I've observed one street alone among  three restaraunts serving
similar clientele all three main forms of refill policy: free,
discounted and full price.

If the above hypothesis is true, AND if indeed the non-free-refill restaurants do cater to the same clienteles, they will not be able to sustain this policy for very long.



PIERRE LEMIEUX

Visiting Professor , Université du Québec à Hull
Research Fellow, Independent Institute
<http://www.pierrelemieux.org>
[EMAIL PROTECTED] (Backup: [EMAIL PROTECTED])
Montréal address:
C.P. 725, Tour de la Bourse, Montréal, Canada  H4Z 1J9
Fax: 1(819)585-4423
PGP Key 0xBDFFCD16
Fingerprint: CF3E 4A3F 57AB 8AB2 88FB  A1D8 C83D 2E15 BDFF CD16

**********************************************************
"L'homme vivant sous la servitude des lois prend
sans s'en douter une âme d'esclave."
The man who lives under the servitude of laws takes,
without suspecting it, the soul of a slave.
(Georges Ripert, Le Déclin du Droit, Paris, Librairie
Générale de Droit et de Jurisprudence, 1949, p. 94)

**********************************************************

Reply via email to