The standard approach to identifying second degree price discrimination is based on examining correlations between product menus and prices. When product menus are endogenous, however, tests for price discrimination may be biased by the fact that unobservables affecting costs or demand may jointly determine product menus and prices leading one to falsely infer price discrimination. Attempts to ...

We use data from restaurants in Shanghai, China to conduct a new empirical analysis of prices and coupons. Our results show a positive relationship between prices and online coupons. Moreover, the price premium from couponing is higher for restaurants about which consumer values appear to be more uncertain. When consumer uncertainty is high, restaurants that offer coupons have an average price ...

As economists use the term, price discrimination means charging some buyers more than others for essentially the same product or service. Is it a bad thing? Buyers paying the higher prices understandably resent the practice. They might thus be surprised to learn that it often enables them to enjoy both lower prices and higher quality than would be possible if sellers charged the same price to e...