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NYT article on why price discrimination best serves consumers
Submitted by Scott Cleland on Thu, 2006-07-06 13:07
Today's New York Times article by Robert H. Frank is an excellent and clear explanation of how price discrimination best serves consumers. Mr. Frank is an economist at Cornell. One of his headlines says: "If price discrimination seems wrong, try taking another look."
The neutrality-ites have used buzz-word blackmail in Washington to try and make those who oppose NN as being "for discrimination." Discrimination is understandably a bad word politically becuase a lot of people have been unfairly and illegally discriminated against in our country's history and it still goes on today.
That being said, applying this perjorative word to the NN debate ill serves consumers and the Internet. If any discussion of the economic term "price discrimination," is politically off-limits, consumers and the Internet will be the ones who suffer most.
As Professor Frank aptly explains in his article using the examples of airfare and laptops, he shows how pricing the same good or service diffferently for different people actually is "rough justice" and lowers the cost for everyone overall. NN is trying for unattainable, impractical and extremely expensive "perfect justice" in the marketplace. NN is naive and misguided micromanagment of the market in the extreme.
Professor Frank's argument gets even more powerful if you add the inefficiencies and unitended consequences of government regulation.
Politically, NN sounds appealing. However, economically NN is very sub-optimal.