Is a Monopoly needed to price discriminate?

[TOM4CWB]

Vader,

I was thinking of you and Chairman Ritter the other day;

As I walked by a seller of Coke, Pepsi, and the generic soda pop stacks of cases upon cases of these drinks!

And then add bottled water to this mix!

In the same store, you can pay 17 cents a 500ml bottle... or $1.00... you choose!

Or you can walk to a tap... and get it FREE!!!

According to recent statements by Chairman Ritter and the single minded seven... a "single desk" monopoly would be the only way this type of price discrimination could work.

Yet exactly the opposite occurs... right in front of their own noses... every time they drive into town!

THe CWB needs to learn... there is much more to marketing...

than the CWB verbally beating growers (being treated more like slaves) up...

When nearly half of these fine folks think the CWB could provide value and want to include the CWB in their business plans in the future!

What a squandering of good will... Vader... why are you recking the CWB?

[Fransisco]

That's a good example Tom. As well as price discrimination it also shows what happens in a multiple buyer and multiple seller environment.

[BennyHin]

One example of many T4 and Frisky.

here is another example:


Why is Microsoft's Windows XP and Vista operating system software never on sale?

Why do they continue to command superior price from the marketplace, while Google, Linux, Corel, etc have to basically give away their products, even though their software is often as good or perhaps better.

[Fransisco]

Try pricing out a mac sometime. There's nothing giveaway on one of those units.

[FarmRanger]

Benny, suppose I was selling a competing operating system to Windows, and found a customer who was willing to pay more for that system.
Would it be fair for Microsoft to be able to demand that I obtain a license from them, and then pay any premium I received to them in fees?

[Fransisco]

<b>The Real Enemy<b>
The true foe of free competition is not Microsoft but the EU bureaucrats attacking it in the name of competition

Valentin Petkantchin
Financial Post


Wednesday, April 11, 2007


Sales of Vista, Microsoft's new operating system, appear to be exceeding forecasts. Meanwhile, Brussels is ramping up its test of strength with the software giant.

Under the pretext of protecting competition, and following record fines of several hundred million euros and a requirement to disclose strategic information to its competitors, the European Commission is moving toward controls on the prices of this information. Although some competitors may gain, in reality these measures all go against the principle of free competition and against consumers.

Despite the additional time granted to Microsoft (the company now has until 23 April to respond to Brussels's Statement of Objections), the commission's readiness to influence the prices of interoperability interfaces embodies a number of perverse direct effects.

First of all, in a framework of free competition, it is consumers who end up deciding if a product or service is sufficiently innovative by choosing whether or not to buy it. In this particular instance, commission technocrats have taken it on themselves to decide that the information provided by Microsoft "does not contain significant innovations." Letting the commission issue decrees in this matter does nothing to promote free competition.

Furthermore, with free competition relying inextricably on respect for the property rights of parties in the market and on free negotiation of prices, the commission is clearly on the attack here as well. After fabricating an artificial "market" in information on the interoperability of the Windows operating system, something that might certainly have remained a commercial secret, the commission is being drawn inescapably into seeking to control their prices as well.

But the real danger comes, indirectly, from an unrealistic vision of competition, based on market share, that pushed the commission into condemning Microsoft initially for "abuse of dominant position" in operating systems. It also accuses the company of using this "position" to attack other niches in the software market and hampering competition.

From an economic standpoint, the intensity of competition should not be measured by market share, as the commission has done. The fact that a company such as Microsoft equips the great majority of PCs around the world does not mean competition is somehow threatened or diminished.

Unless competitive entry is blocked by law, competition may come not only from existing operating systems but also from potential competitors joining the fray, drawn by the opportunity to serve consumers better and thereby make a profit.

Even if the market shares of competing operating systems are very low today, nothing stops consumers who find Windows unsatisfactory from turning to competing products. It is certainly feasible to opt for Apple's operating system by buying one of its computers. It is also possible to put together one's own computer, or have an independent professional do so, and equip it free of charge with the Linux operating system. Companies such as Red Hat or SUSE specialize in the sale of complete Linux-based packages, with extras such as technical assistance, enabling computers owned by businesses and individuals alike to run on Linux.

If there were truly a demand for options other than the Microsoft operating system, companies would not hesitate to specialize in meeting this demand. On the contrary, if Microsoft retains a "dominant position," it is because it offers today's best alternative in consumers' eyes.

But competition can also come from new players. Although merely a potential constraint, this is just as real for Microsoft as the existence of direct competitors. For instance, what would prevent Intel, the number one maker of microprocessors, from competing against Microsoft in operating systems, just as Microsoft could one day decide to build its own computer from scratch -- including a processor in competition with Intel -- and to be the only firm selling machines running on Windows?

Contrary to what one may be inclined to think initially, this sort of competition may already be starting to emerge. For example, Red Hat and Intel just announced that they are linking up to help the latter's reseller partners "with rapid entry into the expanding Linux marketplace with Red Hat's comprehensive portfolio of solutions and new ways to provide their customers with more value".

In this context, the antitrust authorities in Brussels -- with their tendency to punish companies overwhelmingly favoured by consumers -- may paradoxically stifle competition. Their policy can only induce Intel to hold back on moves to advance projects that challenge Microsoft's "quasi-monopoly," should the opportunity arise to provide greater consumer satisfaction. Does the commission not already have Intel in its sights because of another presumed "abuse of dominant position" with its 80% world market share in processors?

The commission's relentless attitude toward Microsoft may artificially protect some current competitors, but not competition as such. When there are no legal barriers to entry, consumers can stand up on their own and choose the companies that best meet their needs. Microsoft is constantly subjected to the market test and must continuously win consumer confidence. Free competition needs to be protected, not against Microsoft but rather against Brussels.

- - -

- Valentin Petkantchin is research director at the Brussels- and France-based Institut economique Molinari.

© National Post 2007

[Lifer]

For the bottled water question. Do you not need to know what is actually being sold. What consumer need is being filled.

also checking to see if any one is checking on these oldies.

[TOM4CWB]

Lifer,

The customer is the person spending the money... will they want pop, water, or tap water!?

Salesmanship can change a mind in seconds... to which they will choose!

[Lifer]

Yes Tom what you say about salesmanship can be true.
For a salesman to do a job (either positive or negative) they need to know what you want to buy. Is it a drink? water, pop, etc.

Is it a story? Bottled water from crystal clear glaciers lovingly filled by vestal virgins.

Is it to be part of something? People they can relate to use this product.


What need of the customer is being filled?

I wonder why people drive out of their way to pick up a coffee at a Tim Horton drive thru? I don't think it is because they all like the coffee better then the one at home or work.

So no a monopoly is not needed to price discriminate.

[RandyHoback]

just test test