Originally Posted by NickCarraway
You are willing to pay more because the drink comes with an experience. But you have to pay more because the jazz club can engage in a species of monopoly pricing.
It's called captive pricing
Yes, I know. But don't get all business economics-y. It seems to upset people.
Originally Posted by lawyerdad
Originally Posted by Bounder
But I do get the point. Well, that one, anyway. You are willing
to pay more because the drink comes with an experience. But you have
to pay more because the jazz club can engage in a species of monopoly pricing. Paying more does not enhance your experience (pace Veblen).
No, you don't. Nor do you understand the term "monopoly pricing". It's no more monopoly pricing than the price of a Honda Versa embodies "monopoly pricing" because you can't buy a Versa from anyone other than Nissan. It just reflects basic economics.
Nope, sorry. Cars -- and a great many other things -- are examples of substitute goods. If the price of a Nissan Versa gets too high, you can buy a similar car from Honda or some other company. Even though these goods would not be identical, they still compete with each other. So, while it is true that you can only buy a Versa from Nissan, Nissan can't successfully engage in monopoly pricing.
But suppose once you buy your Nissan Versa, you discover that the only oil filter that will fit it is produced by Nissan and there is no after-market oil filter that will fit. Since you must buy oil filters and you must buy them from Nissan, Nissan can charge a packet for their oil filters, several times what a "generic" oil filter would cost in an open, competitive market. And if you don't believe that this sort of thing actually happens, you have never owned a printer.
So, yes, both the jazz club and Nissan do engage in a species of monopoly pricing. It is, indeed what is called "captive pricing", as the poster above pointed out. Perhaps I should have just called it that rather than referring to it as a "species of monopoly pricing" but I was trying to avoid using too much jargon. Apparently, I used too much as it was.
Also, you may want to re-read the Veblen Wikipedia entry if you think referencing Veblen says anything about the subjective experiences of individual market participants.
Veblen goods are goods that become more desirable as they become more expensive. By contrast, for most things, demand goes up as the price goes down. Drinks in a club are, typically, not Veblen goods because people would drink more if the prices were lower.
Originally Posted by ter1413
Malcolm Smith guilty of trying to rig NYC mayor’s race
I don't get NYC politics at all. Why would a Democrat want to bribe people so he could run as a Republican in NYC? If you couldn't get elected as a Democrat, why would you think you would have a better chance as a Republican? Plus, switching like that would destroy your career. Has this guy never heard of Arlen Specter?