Eugene C
wrote,
> DeLong is doing a new wrinkle now (new to
him, apparently) with the discovery that monopoly and
> discriminatory pricing is good for society.
These people cannot be topped or stopped -- only ignored by us.
The topic of price
discrimination--in the context of the Internet--seems to be cutting edge stuff
in the mainstream world. The debate is both over (1) is it good or bad? and (2)
is it possible to implement?
The reason it is
cutting edge is the "consensus" in the business world is that price discrimination is
profitable, possible, and inevitable on the internet. A recent article on the
plans by IBM, Compaq, and HP to introduce a (weak) form of dynamic pricing
appears at http://www.infoworld.com/articles/hn/xml/01/05/14/010514hndynamic.xml
Although DeLong and
others claim that price discrimination (that goes beyond what is possible
outside the Internet) is possible and is associated with good things,
this is the result of fuzzy (and wishful) thinking.
In fact, the jury is
out as to whether (first degree) price discrimination is really possible on the
Internet. It would be easy for customers to foil attempts to target them for higher
prices by eliminating information in cookies (or using cookies with false
information within them) and/or by learning shopping behavior that a shopping
site's algorithm
believes indicates someone with a high elasticity of demand. And, of course,
Amazon.com got slapped on its virtual hands when it started activities that
would permit it (so it thought) to introduce price
discrimination.
Guess
who's been reading up on price discrimination today?
;>)
Eric
