Dollar Hot Dogs, Coupons, and Bidding for Wallets
The Answer Is Transaction Costs
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The Cost of Coupons
Coupons play the same role as the long line on dollar hot dog night at the ballpark. They sort buyers. You sell at a lower price to the folks who would not have paid the higher price anyway. The imposition of transaction cost as a rationing device can benefit the seller that is increasing transaction costs strategically. It enables market segmentation and allows you to price discriminate. This increases the profits of the company but it's a transfer from consumers.
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