Goldilocks Tries Price Discrimination For Size

Like baby bear's porridge, the middle product looks just right. Why do the ink cartridges for computer printers cost so much? It can be as much as 20 or 30 per cent of the cost of the printer itself. Why do the makers of software usually offer it in different-priced versions? Why does Microsoft sell its Word, Excel and PowerPoint programs bundled together in one Office ``suite"? The long answer is that all these things are ingenious examples of what economists call ``price discrimination". They

Sellers Know A Product's Worth Is Whatever You Are Willing To Pay

Why do the ink cartridges for computer printers cost so much? Why do the makers of software usually offer differently priced versions? The long answer is that all these things are ingenious examples of what economists call ``price discrimination". They are discussed in the best-ever book about Internet economics, Information Rules, by Carl Shapiro and Hal Varian (Harvard Business School Press, 1998).