I recently saw a photograph of a street vendor’s stall in Argentina. The menu reads simply Orange Juice $5. Jugo de Naranja $4.
Here unsuspecting Anglophones are paying a premium of 25 per cent for not knowing Spanish. It’s a practice known to economists as price discrimination — in other words setting a price in proportion to a customer’s propensity (or indeed ability) to pay. There’s a lot of it about — and in the internet age we can expect to see it more and more. How low a price will a website quote you for your new Mini Cooper if it knows you already own a Jaguar? It’s reminiscent of the famous comedy scene where Bill Cosby’s attempts to bargain down the price of a car are ruined when a passing friend greets him as Dr Cosby.
Price discrimination explains why, when you pay £200 for a hotel, your internet access costs an extra £15, while in cheap hotels it’s typically free.
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