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Comment by RobRivera | Hacker News Reader

I dont like the idea that person A and person B will be given 2 different prices for the same commodity. It is discrimination.

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It is more egalitarian to sell the same commodity to a poorer person for less money, and a richer person for more money. This can be generalized to “selling to a person able and willing to pay more for a higher price and a person less able and less willing for a lower price” (as long as it is not lower than the COGS).

Price discrimination does not mean anyone is getting hosed. A simple example is someone that wants to go through the trouble of using coupons at grocery stores. A person with less time and more money might choose convenience, or a brand name product. A person with less money can still buy using a coupon, or buy generic.

Obviously, that doesn’t mean a richer person is obliged to pay more. But it’s not evil to attempt to maximize the take based on differing buying power / desire.

As the article shows however the discrimination is always also against less tech-savvy (or less educated) people, who often are also not rich, for example older people. My parents would almost always pay more for online shopping products than me because they don't know the best way to search for prices, or can't tell which shops are trustworthy.

Less savvy people are always going to get worse deals. My mom does not read English, so she did not take advantage of coupons on newspapers, even though we were poor.

The game has obviously changed quite a bit, but I specified “able and willing to pay more” for this reason.

Two factors coincide for a buyer to make a decision to purchase something, ability and willingness. The seller does not benefit if they drive away people who are not able to pay more with too high prices, and if they give discounts to people who are able and willing to pay more, but savvy enough to figure out how to get the discount.

So a seller will enact hurdles for the savvy to see who is willing to do more work to get a discount, or they can sell under different labels to sell to both people paying lower prices and higher prices, under the guise that it is a different product.

Most common though is to slightly tweak a product so that you are not selling the same exact thing at different prices, so the person paying more feels like they got more for more money.

In theory this discrimination will be discovered (as in, see article) and if people don't like it they will select for companies that do not have (or have less) such discrimination.

If all businesses discriminate then there is an opportunity to compete using no discrimination as an edge.

Just as, for example, if a business decided (if it was legal) to only allow people of a certain race to enter, I would like to think that most members of that race would be disgusted enough to boycott that business and the business will rightly fail.

Finally, people already effectively pay different amounts for all sorts of things due to varying amounts of tax paid.

The private sector can't detect or profit from your tax paid so they use where you live and other signals like whether you're using an iPhone etc. as a proxy for your income/wealth.

>Just as, for example, if a business decided (if it was legal) to only allow people of a certain race to enter, I would like to think that most members of that race would be disgusted enough to boycott that business and the business will rightly fail.

We literally have federal laws outlawing this because it was, in fact, a selling point to exclude other races. Are you unaware of the history, or just hoping that racism has successfully been ended in the United States?

1964 was 60 years ago.

So you think if the law was removed from the books people would simply choose not to have racist public establishments in 2025?

Most businesses struggle to stay afloat without adding racial discrimination.

I suspect almost all such businesses would die quickly.

So yes, there would be such public disgust and stigma that even those patrons who valued such a business would hopefully hesitate to expose their bigotry.

People really take Adam Smith way too seriously. He lived at a time when the economy was made up of independent artisans not people working for large multinational corporations. If markets were really so good at regulating themselves why were any government standards necessary at all?

The reality is, every product has an asymmetry of information, and the more complex it is, the higher the asymmetry. And you can’t determine the quality of a product until you buy it. And determining quality takes time, which is a limited resource.

> the business will rightly fail

In reality, what stops bad behavior is regulation because in reality, people do not have infinite time and infinite information to assess each thing they consume.

> In reality, what stops bad behavior is regulation because in reality, people do not have infinite time and infinite information to assess each thing they consume.

Reputation is much easier to destroy and bad behavior is much harder to hide today than 50 years ago due to the easier spread of information.

There is still a huge spectrum of business behaviour that is not violating regulations. In the aggregate businesses who please their consumers more will thrive compared to those that don't.

Adam Smith is often used as symbol of laissez-faire capitalism but was explicitly a proponent for regulation in situations where the market failed, such as this one imagine.

What you probably mean is that people take the concept of the invisible hand too seriously. Which was a relatively minor point in the book, and has somehow been magnified to the point of absurdity by the economic and political trends of the last 40 years.

Adam smith is way more reasonable than you’d think, given how he’s portrayed in the modern era.

In theory, that is true. In reality, there's a thousand reasons why it's not in the world of digital (and many non-digital) services in 2025.

The prices might seem fair to each, until they learn what the other was charged. At that point the sellers likely pays a price in terms of reputation.

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