Archives for price theory

FREAK Shots: What Does 75 Cents Do?

Blog reader Justin Smith sent this photo of a dry-cleaning shop in his Greensboro, N.C., neighborhood which apparently didn’t account for inflation with its original name. (You can still see “$1 Cleaners” in the window.) On his blog, Smith suggests that they should have considered a different economic equation before deciding to raise prices: marginal […] Read More »

When to Buy World Series Tickets

What a World Series! I can’t wait to see the Phillies try to break “the curse of Billy Penn,” which has prevented any major Philly sports franchise from winning anything since 1983. That’s right, not a single sporting success across the four major sports franchises over 25 years, which adds up to a century-long accumulated […] Read More »

If Teaser Rates Work for Buying Houses, Why Not for Online Music?

Taken from We’ve blogged repeatedly about innovative pricing schemes, particularly for downloadable music; there was this one, and this one, and this one too. Now from a reader named Nils Thingvall comes word of a newish indie site called Amie Street (here’s some background) with a pricing twist that might remind some people of […] Read More »

Why Are Discount Stores Full of XS and XXL Clothes?

Photo: sporkist My former Ph.D. student and frequent co-author Erik Snowberg sends along an interesting question: Why do discount clothing stores (like Nordstrom Rack — and clothing sales in general) have an excess of really small and really large sizes? I have to admit, I’ve always wondered. Erik continues: The typical answer seems to be […] Read More »

Should Moviegoers Pay for the Good Seats?

We came across a European relic in Munich: a movie theater that still prices seats differently, with the seats in front cheaper than those in back. This used to be common in European movie theaters; today, as in the U.S., there is one price for all seats. In the U.S. system the good seats, near […] Read More »

How Rat Meat Becomes a Rarity

Photo: Chris Barber A Reuters article notes that the price of rat meat in Cambodia has quadrupled, even as the overall inflation rate is “only” 37 percent. Consumers are substituting away from higher-priced meats (beef is still four times as expensive as rat) toward rat, increasing the demand for rat meat. If the relative price […] Read More »

Where Aspirins Cost $15

  It costs 10 euros — about $15 — for a package of 50 aspirins at the local drugstore in Bonn, Germany! What an outrage. Why so expensive? I could get a bottle of generic aspirins at home for well below $5 for 100! Looking around I also notice, as the photo suggests, a remarkable […] Read More »

Price Discrimination Because of Fat Tourists?

An interesting and very common form of price discrimination exists on several chairlifts I’ve seen around the world, including the one in the picture here from Altenahr, Germany. The price for a trip up the hill on this lift is 3 euros, up and down is only 50 percent more, 4.50 euros. This might be […] Read More »