Price Discrimination, Competition and Regulation
The business environment is becoming unpredictable due to the excessive use of emerging technologies (Armstrong & Vickers, 2018). Additionally, the competition among business organizations is growing each day, and this forcing business organizations to become highly creative and innovative to find ways of surviving in the market and to remain competitive in the long run. Different strategies have been deployed by various organizations to deal with the competition. Among them is by using competitive strategies like differentiation and pricing. Through direct and indirect price discrimination, organizations have found reliable ways of differentiating high and low-value consumers. Through this, the organizations have been able to set optimal prices for the same products. However, it should be noted that the two are different in that indirect price discrimination, the organization can quickly identify the two groups.
On the other hand, in indirect price discrimination, the organization does not know the two groups hence uses different methods to identify them. The most commonly used methods include metering to identify high-value consumers, volume purchase analysis, and lastly is the manufacturing of different versions of a product and observe the different consumes that go for the various products. Strategic games involve the use of multiple strategies by organizations to know how and when to respond to any issues affecting them.
References
Armstrong, M., & Vickers, J. (2018). Price Discrimination, Competition and Regulation. The Journal of Industrial Economics, 41(4), 335. doi: 10.2307/2950596