Price Discrimination: Illegal or Not?

A question: would perfect price discrimination reduce the marginal value of income?

This may be of interest if industries that price-discriminate heavily - education, say - dominate larger proportions of family spending.

Indeed, imperfect price discrimination reduces the marginal value of income. I've been meaning for some time to try to work out a model of this, but never seem to get around to it.

Incidentally, note that it's quite possible a successful business could engage in price discrimination without even realizing it, and is likely that, in some ways, many do. Those whose procedures, purely incidentally, do a better job of price discrimination will (ceteris paribus) outcompete others.

In hindsight, my hastily written comment was incorrect and I agree that in the case provided it was not illegal price discrimination. However, not necessarily on the grounds offered by the wikipedia article. I don't know about the case law but on its face the act itself wouldn't seem to distinguish based on a final user.

"It shall be unlawful for any person engaged in commerce. . .to discriminate in price between different purchasers of commodities of like grade and quality. . .in commerce, where such commodities are sold for use, consumption, or resale . . .and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce"

Wouldn't use and consumption include final users? Any antitrust attorneys who can shed some light on this? My suspicion is that the present case fails on the anti-competitive element instead.

I should add: Given the events that prompted the adoption of the act, wikipedia's take seems proper,but the language of the statute doesn't spell it out as such.

I think the most common method of price discrimination is to offer different levels of features for a product and charge a very large markup on those features compared to the markup on the base model. I think of cars and pizza.

I think competing with my first example of price discrimination has to be the use of time and pricing. This is the practice of introducing a product at a high price and then lowering it over time. This is of course the strategy of electronics producers.

What I like about this method of price discrimination is that more power is given to the consumer to decide how much to pay.

Price discrimination should be effectively competed away by having increasingly lower margin middlemen buying the product on behalf of JS above.

Different middlemen would achieve lower margins buysing on JS's behalf at no risk thus the price would tend towards what BZ is paying.