ERIC Number: EJ1173735
Record Type: Journal
Publication Date: 2014
Teaching Consumer Price Discrimination: An Interdisciplinary Case Study for Business Law Students
Edwards, Matthew A.
Journal of Legal Studies Education, v31 n2 p291-324 Sum 2014
It is generally agreed that price discrimination can, in some circumstances at least, be an extraordinarily unpopular business practice. In late 2000, customers discovered that Amazon.com was varying its prices online for the exact same products. Although the incident is almost fifteen years old, it has become the standard reference in law review and business literature on the risks of consumer price discrimination. This article uses the Amazon.com story as a launching point for a hypothetical case study on the subject of consumer price discrimination. Both the substantive topic and the teaching methods employed by this case study should be of significant value to both undergraduate and graduate business students. In terms of teaching methods, the advantages of using case studies in the legal studies classroom have been fairly well established in the literature. The body of this article aims to provide the basic legal, ethical, and economic background necessary for instructors to introduce the rich topic of consumer price discrimination into the business school classroom. Part 2 gives some background on the economics of price discrimination so that the instructor is fully equipped to explain what price discrimination means, why firms engage in this practice, as well as some of the real-world limits on its use. Part 3 addresses the legality of consumer price discrimination and explains why price discrimination against end-use consumers will usually be legal under the Robinson-Patman Act. Part 4 touches on some of the ethical issues raised by consumer price discrimination. Throughout the article, there are discussion questions that instructors can use to stimulate discussion on the major legal, ethical, and business points raised by the case study; these questions can be assigned as homework prior to class or can be integrated into the class discussion, depending on the instructor's preferences. The hypothetical Gargantuan.com case study, which includes a transcript of a meeting between a consulting firm and a potential client and an excerpt of the relevant law, is contained as an appendix to this article.
Descriptors: Business Administration Education, Consumer Economics, Teaching Methods, Consumer Education, Undergraduate Students, Graduate Students, Purchasing, Case Method (Teaching Technique), Law Related Education
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Publication Type: Journal Articles; Reports - Descriptive; Tests/Questionnaires
Education Level: Higher Education
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