
Prof. Alessandro Gavazza of London School of Economics on mortgages, cars and market friction
Scientific Sense ®
00:00
Do the Authorities Have a Target?
If there are a plethora of different products, the different features, then there are more choices in the market. That might design into the needs of different customers with varying financial constraints. So that's absolutely right. It's all predicated on the heterogeneity of the consumer. And so, prices discrimination allows targeting of prices, but also of products to these two different type of consumers. As a result, of this targeting, also the consumer benefits from these targeting, not exclusively the seller.
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