"Dynamic Pricing"

[Seiji Steimetz]

It looks like (3rd degree) price discrimination is becoming more sophisticated.  Check out the following article:   http://dailynews.yahoo.com/h/zd/20000911/tc/behind_amazon_s_preferential_pricing_1.html   According to the article, Amazon.com uses various gauges of your "price sensitivity" (read: own-price elasticity of demand), such as which browser you're using, to determine what price to charge you for DVD's.  It also discusses Coca-Cola's investigation into vending machines that can automatically adjust prices according to outside temperature.   I think most economists will think this is pretty cool.  However, I doubt that the public response to such practices will be favorable.  This leads me to wonder about one legal ramification.  From what I understand, price discrimination is de jure illegal (but not de facto illegal) if it interferes with competition.  Will price discriminating Coke machines impede or promote competition?   Seiji ___________________________________________________ Seiji Steimetz                               Office:  Social Science Tower 305 Compulsory Union Fee Paying Graduate Student University of California, Irvine     Email:   [EMAIL PROTECTED]      Department of Economics          Web:    http://zotnet.net/~steimetz     3151 Social Science Plaza        Office:  (949) 824-1372 Irvine, CA 92697-5100   "Every time a calf is born, the per capita GDP of a nation rises.  Every time a human baby is born, the per capita GDP falls."   -- Julian Simon ___________________________________________________