Brian Albrecht on Price Discrimination

ICLE Chief Economist Brian Albrecht was cited by columnist Jonah Goldberg in USA Today in a piece on price discrimination. You can read the full piece here.

Brian Albrecht – from whom I got that Sowell quote – disagrees. He thinks price discrimination of this sort conveys – or can sometimes convey – more information, not less. He also argues, persuasively, that price discrimination can be a net benefit to the general welfare. He uses an extended example of a burger joint to illustrate the point. But I’ll offer a different one.

…But this isn’t quite the same thing as personalized pricing. It seems to me that sticking it to the well-off when developing a new product or technology is different from sticking it to the rich just because you can get away with it. I’m open to Albrecht’s point that both approaches can be a net benefit for society (a Pareto improvement) since pretty much every consensual economic transaction is non-zero sum. The rich person who voluntarily buys an overpriced umbrella still paid only what he thought it was worth to him. Lots of rich people waited for the price of mobile phones to go down before getting one.