Colleges in the US charge high sticker prices but routinely offer discounts to individual students. This column presents research showing that colleges use a student’s federal aid form to learn about willingness-to-pay and to engage in substantial price discrimination in a way that amounts to a tax on income, with the primary effect of increasing tuition revenues. Nevertheless, the price discrimination also results in some redistribution to low-income students as well as a modest increase in student–college match quality.
Ian Fillmore, Wednesday, March 4, 2015
Joshua Gans, Wednesday, June 11, 2014
Netflix recently agreed to pay Comcast for faster access to Comcast’s customers, intensifying the debate over ‘net neutrality’ – the principle that internet service providers should treat all data equally. This column argues that without net neutrality regulation, ISPs can capture the benefits of higher-quality content, thereby discouraging innovation from content providers. To be effective, net-neutrality regulation must prevent content-based price discrimination on both sides of the market.
Pascal Courty, Mario Pagliero, Wednesday, February 4, 2009
Is the music business doing business well? This column shows that offering multiple seating categories at concerts raises revenues by about 5%. But a quarter of concerts do not price discriminate, and most only offer two ticket types. The music industry seems to be leaving money on the concert floor.