Study Notes
The Hurdle Model of Price Discrimination
- Level:
- AS, A-Level
- Board:
- AQA, Edexcel, OCR, IB
Last updated 21 Mar 2021
The hurdle model is associated with economist Professor Robert Frank. The hurdle method separates buyers with low minimum buying prices from buyers with higher so-called reservation prices.
To take advantage of a lower price, the consumer must be prepared to overcome or jump over some kind of hurdle which acts as an inconvenience.
For example:- They might have to delay their purchase until a product is remaindered or sold off at lower prices when a more advanced version is available e.g. second edition paperbacks are significantly cheaper than hard back books, it is cheaper to buy/rent/stream older DVDs a few months after their first release
- Consumers may have to risk not getting the product at a time and place of their choosing e.g. relying on stand-by tickets for shows and airlines
- They may get a deeper discount if the product is mildly damaged e.g. dented household appliances - “seconds”
- Discounts may require customers to collect & redeem coupons
Customers prepared to do this tend to be more price sensitive
You might also like
Economics of price gouging after a natural disaster
17th May 2011
Price gouging in Edinburgh
11th August 2008
Robert Frank on Income and Happiness
9th March 2008
Price elasticity of demand (Revision Presentation)
Teaching PowerPoints
Determinants of Demand (Revision Presentation)
Teaching PowerPoints
Competition & Monopoly Revision Quiz
Quizzes & Activities
Elasticity of Demand & Supply Revision Quiz
Quizzes & Activities
Shifts in Market Demand
Study Notes