Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Price Discrimination (and the Brussels Conference Market)

with 4 comments

A thought on something that lawyers – including myself – often have a hard time to understand.

Conventional economic theory posits that price discrimination by a monopolist is conducive to allocative efficiency.

This is because price discrimination entails a welcome departure from uniform monopoly pricing. With price discrimination, the monopolist undercuts its own uniform price to the benefit of certain customers (or to categories of customers as shown in the above picture). With price discrimination, customers that could not initially take the uniform monopoly price now get a chance to be served.

Furthermore, the monopolist increases output and, assuming fixed costs, achieves economies of scale. Price discrimination is thus also conducive to productive efficiency.

With this background, I was last week confronted with an odd price discrimination scheme which, in my opinion, brings little – if no – improvements in terms of allocative efficiency. A famous conference organizer has the following price menu for a forthcoming competition law event:

On cursory examination, this conference organizer has designed the above price menu to attract academics, judges and young lawyers. However, I doubt this price scheme will attract many of them, simply because those fees are well beyond the average reservation price of such customers. Saving appearances?

An additional remark: given that this conference is sponsored (law firms essentially) and that most speakers are brussels-based (means no transport/accomodation costs), I do not see the cost basis for such rates. Although I am not a huge fan of excessive pricing cases, the Brussels competition conferences market could make an interesting candidate for Article 102 TFEU proceedings. Still to see whether there is a dominant player on this market. Food for thought.

Written by Nicolas Petit

8 March 2011 at 12:30 pm

4 Responses

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  1. and those were the early bookings! Uniform monopoly price for all if you want to book now! 🙂

    GDS

    8 March 2011 at 1:40 pm

  2. I had the exactly the same thought. These rates are bonkers.

    Damien Geradin

    8 March 2011 at 11:50 pm

  3. Wouldn’t they just say that the high markup accounts for ‘networking’ and/or maybe other immaterial benefits? Or does everybody know everyone anyway?

    step21

    10 March 2011 at 12:01 am

  4. […] above picture is proof that I eventually attended the expensive conference which triggered a post on price discrimination two days […]


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