Abstract | Nowadays people are more and more exposed to all kinds of price discrimination, whether they are aware of it or not. This concept in economy has, by developing different strategies to earn or spend money, brought price discrimination to a whole new level.
In theory, the price discrimination is charging different prices for the same products or services. Basically, price discrimination was more acceptable before people started studying and observing the details and strategies that have been used in making a final price. As time was passing by and more and more people became conscious about this kind of earning/spending money, economists needed to develop new ways to conceal the discrimination through different layers of business. In this way, people/buyers/users couldn’t detect the threat that easily.
Price discrimination can either have positive or negative effects, depending on the group of population that is being observed. For example, students have much more benefits in most of the situations where there is a money compensation. On the other hand, there is the negative effect for all of those who are not students, due to the fact that they need to spend more for the same type of product.
When it comes to big companies from which banks and the state have much use, laws and regulations are mostly directed in a way that will eventually bring more profit to the companies. Furthermore, those company profits will lead to higher earnings for banks, and through taxes to higher earnings for the state as well. Nowadays, borders between countries have enabled an even more providence of price discrimination. When it comes to buying products and services abroad prices can differentiate in amounts that exceed 50%. A higher level of price discrimination can be made through global credits that are given to countries around the world. It has been detected that Croatia pays high interest rates due to the position in the world’s economy. Also, tax or the VAT is one of the main criteria for setting the final price. More risky or less, consequences fall on the population of those countries. In the end, everyone would like to get the biggest piece of cake. |