The Ethics of Price Discrimination

Business Ethics Quarterly, 21:4 (October 2011); ISSN 1052-150X pp. 633-660

28 Pages Posted: 25 Jun 2014

Date Written: 2011

Abstract

Price discrimination is the practice of charging different customers different prices for the same product. Many people consider price discrimination unfair, but economists argue that in many cases price discrimination is more likely to lead to greater welfare than is the uniform pricing alternative — sometimes for every party in the transaction. This article shows i) that there are many situations in which it is necessary to engage in differential pricing in order to make the provision of a product possible; and ii) that in many such situations, the seller does not obtain an above-average rate of return. It concludes that price discrimination is not inherently unfair. The article also contends that even when conditions i) and/or ii) do not occur, price discrimination is not necessarily unethical. In itself, the fact that some people get an even better deal than do others does not entail that the latter are wronged.

Keywords: Price discrimination, Pricing, Equality

Suggested Citation

Elegido, Juan Manuel, The Ethics of Price Discrimination (2011). Business Ethics Quarterly, 21:4 (October 2011); ISSN 1052-150X pp. 633-660, Available at SSRN: https://ssrn.com/abstract=2458467

Juan Manuel Elegido (Contact Author)

Pan-Atlantic University ( email )

Km. 52 Lekki-Epe Expressway
Lagos
Nigeria

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