|Statement||Yves Mertens and Victor Ginsburgh.|
|Series||CORE discussion paper -- no.8424|
"Product differentiation and price discrimination in the European community," CORE Discussion Papers , Université catholique de Louvain, Center for . MERTENS, Yves & GINSBURGH, Victor, "Product differentiation and price discrimination in the European Community: The case of automobiles," CORE Discussion Papers RP , Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). Product Differentiation and Price Discrimination in the European Community: The Case of Automobiles The paper is concerned with the determinants of prices of European and Japanese cars in five EEC countries. The basic idea is that under perfect competition, prices should reflect production costs, and hence depend on the technical. Contractual freedom plays a major role in European law, which implies that sellers may determine their own retail price. But if price differentiation leads to discrimination .
Price discrimination is a selling strategy that charges customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to. Price Discrimination and Price Differentiation. It is a fundamental economic principle that the way to maximize profits is to charge a price that equates to the value of the product to each consumer, instead of selling at a uniform price to all consumers. This is the idea behind price discrimination. Price discrimination is shown to be both significant and persistent 1 within the European Community. Further sources of this discrimination are shown to lie in differences in price elasticities, in industrial concentration and a lack of price competition and in other features specific to . one price, it may maximise profits by setting a price of €20 (see Figure 1), which will prevent certain consumers from buying the book because they believe it to be too expensive. In this example, therefore, price discrimination results in more customers being able/willing to buy the product. 2 Price discrimination as an abuse of dominance.
Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets. Price discrimination is distinguished from product differentiation by the more substantial difference in production cost for the differently priced products involved in the latter strategy. THE techniques of price discrimination are grouped into three main classes: personal discrimination, group discrimination, and product discrimination. Personal discrimination makes differences between individual customers the basis for extending differential treatment to them. Group discrimination differentiates not between. Legal Issues Related to Price Discrimination and Product Differentiation. Price discrimination has a negative connotation because monopolies and oligopolies A market situation in which each of a few producers influences but does not control the market. sometimes use their market power to unfair advantage and engage in predatory pricing schemes. She chose the car she wanted to book on the website of a Spanish car rental company. However, when she entered her address to finalise the reservation, she saw that the total price for her car rental increased by EUR Hilda contacted her local European Consumer Centre to complain about this price discrimination.