Question
(12) Read the following article from The Atlantic on the proliferation of price discrimination for online shopping: https://goo.gl/EGFynW to answer the following questions. a.)(4) The
(12) Read the following article from The Atlantic on the proliferation of price discrimination for online shopping: https://goo.gl/EGFynW to answer the following questions.
a.)(4) The article notes that we are moving toward a situation in which perfect price discrimination is no longer "only a classroom thought experiment." Suppose perfect price discrimination were to become a reality. What would this imply as far as consumer surplus, producer surplus, and market surplus in the market for online retail?
b.) (4) The article references a study that showed that by using big data online firm are able to boost profits (e.g. Netflix could boost profits by 14.6%). When firms engage in price discrimination and experience an increase in profits, does that imply that consumers are made worse off as a result? Explain.
c.) (4) Do you agree with the author's perception that the proliferation of price discrimination "makes suckers of us all"? Do you consider the increased price discrimination a net positive or a net negative from society's perspective? Explain.
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