Price discrimination: a classroom experiment

Abstract

[eng] This paper describes a classroom experiment aimed at familiarising students with different types of price discrimination (first, second and third-degree price discrimination). During the experiment, the students were asked to decide what prices to set as monopolists for each of the price discrimination scenarios under consideration. The objective was to allow the students to work empirically, through trial and error, selecting tariffs for each type of discrimination that would maximise a monopolistic entrepreneur's profits. The purpose of the exercise was also to enable the students to differentiate each type of price discrimination and to set prices in each case, as well as helping them to understand the repercussions in terms of welfare for each type of price discrimination.</p>