One method of price discrimination for firms is the use of coupons and rebates.

Question

One method of price discrimination for firms is the use of coupons and rebates. Firms are basically allowing consumers to self-identify their respective price elasticities of demand for a product. Describe the last time you used a coupon or a rebate, and another time where you knew a coupon might be available and yet chose to not bother with it. Make sure to explain how the opportunity cost of your time and effort played a part in the choice you made.

 Do you think price discrimination through coupons is fair? Should there be laws against this behavior? Why or why not?

Explanation / Answer

Last time I used a rebate is at Amazon.com for buying a pair of headphones. Another time when a coupon was available but I didnt bother it was with UBER. They was supposed to provide me a free ride upto 3 kms, but as I have to go a long way I did'nt bothered to get that free ride beacuse if I had opted for it I have to change my cab after 3 kms, which can waste my enough time and also will take much effort to find another cab from that spot as that was a countryside. So keeping for the things in mind and oppurtunity cost of it I preffered not to get that ride rather to take a straight ride and save my time and effort.

I think, price discrimination through coupon is fair. No there should not be any law against this behaviour. Coupons taps into consumers psychology, they feel good from it.  Coupons for example provide a means for retailers and manufactures to lower the price for those customers who are sensitive to it and yet maintain the premium for those who are not.

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