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Price discrimination: A classroom experiment

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  • Paula Aguiló
  • Maria Sard
  • Maria Tugores

Abstract

In this article, the authors describe a classroom experiment aimed at familiarizing students with different types of price discrimination (first-, second-, and third-degree price discrimination). During the experiment, the students were asked to decide what tariffs to set as monopolists for each of the price discrimination scenarios under consideration. The objective was to allow the students to work empirically, through trial and error, selecting tariffs for each type of discrimination that would maximize a monopolistic entrepreneur's profits. The purpose of the exercise also was to enable the students to differentiate each type of price discrimination and to set tariffs in each case, as well to help them understand the repercussions in terms of welfare for each type of price discrimination.

Suggested Citation

  • Paula Aguiló & Maria Sard & Maria Tugores, 2016. "Price discrimination: A classroom experiment," The Journal of Economic Education, Taylor & Francis Journals, vol. 47(2), pages 132-139, April.
    • Handle: RePEc:taf:jeduce:v:47:y:2016:i:2:p:132-139
    DOI: 10.1080/00220485.2016.1146095
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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    Cited by:

    1. Ronald C. Fisher, 2019. "Illustrative Assignments to Incorporate Research and Writing in Introductory Economics Classes," Journal of Economics Teaching, Journal of Economics Teaching, vol. 4(1), pages 1-14, May.

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