Should Firms Price Discriminate? Why Or Why Not?

1265 Words Nov 17th, 2014 6 Pages
Topic: Should firms price discriminate? Why or why not?
You are a high powered consultant and have been asked by a large online retailer to help them decide whether or not they should use price discrimination on their website. You have been hired to analyze and present the economic case for and against firms using price discrimination and to provide a recommendation to the retailer as to what they should do. Your report must be no longer than 1000 words. The report must clearly define price discrimination and outline the potential benefits and potential costs of using it. What does the CEO need to know about price discrimination to decide if, when, how, for what goods/services they discrimination should use price discrimination. That is the assignment.

Price discrimination is charging different people for different price for the same products or services. In this modern years, an enormous measure of buyer particular information has been gathered by retailers and advertising organizations. By utilising information mining methods organisations have the capacity induce from these gigantic databases the inclination of individual purchasers. Firms which do not gather information themselves can even now buy pertinent buyer particular data from immediate mailing databases authorities. Online retailers can distinguish the sources through which clients go to their site and price in like manner. For example, the client comes through a Comparison Shopping Engine (CSE) which they will…
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