One method of price discrimination for firms is the use of coupons and rebates.
ID: 1217671 • Letter: O
Question
One method of price discrimination for firms is the use of coupons and rebates. Firms are basically allowing consumers to self-identify their respective price elasticities of demand for a product. Describe the last time you used a coupon or a rebate, and another time where you knew a coupon might be available and yet chose to not bother with it. Make sure to explain how the opportunity cost of your time and effort played a part in the choice you made.
Do you think price discrimination through coupons is fair? Should there be laws against this behavior? Why or why not?
Explanation / Answer
Last time I used a rebate is at Amazon.com for buying a pair of headphones. Another time when a coupon was available but I didnt bother it was with UBER. They was supposed to provide me a free ride upto 3 kms, but as I have to go a long way I did'nt bothered to get that free ride beacuse if I had opted for it I have to change my cab after 3 kms, which can waste my enough time and also will take much effort to find another cab from that spot as that was a countryside. So keeping for the things in mind and oppurtunity cost of it I preffered not to get that ride rather to take a straight ride and save my time and effort.
I think, price discrimination through coupon is fair. No there should not be any law against this behaviour. Coupons taps into consumers psychology, they feel good from it. Coupons for example provide a means for retailers and manufactures to lower the price for those customers who are sensitive to it and yet maintain the premium for those who are not.