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PaperclipPerfector  1mo ago (text post)   3574 thread views

Friday Fun Thread for January 9, 2026

Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.

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What makes it true or not is how healthy the competition and the market is. A company that only did this to extract more money from each sale would find itself having a hard time finding buyers compared to cheaper competitors. Companies that offer a genuinely good deal don't do it from the goodness of their heart, they do it because it's also a valid business strategy to aim at making a larger number of sales with a lower profit margin.

The issue with price discrimination is that instead of both parties capturing some excess value from the trade, one party captures almost all the excess value, while the other captures epsilon (as in, just enough to make the trade worthwhile, but no more).

In the case of "signaling" addons, it's quite possible that both the car manufacturer and the customer are happier with price discrimination. After all, the point of signaling is that you're showing everyone you paid for something expensive because you have money. If it was cheaper, or if it was available on every trim, that exclusive paint color or colored stitching the rich person paid for wouldn't be useful to signal how rich he is.

A company that only did this to extract more money from each sale...

That is literally every company that uses price discrimination. They don't get punished either because of market inefficiencies or because they sell goods that aren't interchangeable with competitors' goods.

Or because they are being rewarded by the customers who get the low prices. Remember what happened when JC Penney abolished sales and tried to market themselves as offering "everyday low prices".

People who complain about price discrimination are doing it from the frame of "if we ended price discrimination, everyone would get the low prices". But in the real world people love price discrimination when it gets framed as "you get a discount, you get a discount, you don't this time but try harder next time". There are a whole load of businesses where the main purpose of the sticker price is to frame the (often discriminatory) real price as a discount. This doesn't work for airline full fares or hotel rack rates any more because people got wise, but it still works for clothes (see JC Penney above) and it appears to be the norm in a wide range of sectors including new cars, college tuition, and consumer SaaS.

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