Does the video game industry practice price discrimination? (Question inside)?

Question

When a video game for a game console is first released in the market, its price is relatively high. After a few months on the market, the manufacturer issues discount coupons for the video game.

True or False: This is an example of price discrimination.

True

False

I say true...what do you think?

Answer 1

All the games I payed full price turn out to be a rip off........HALO 3......CALL OF DUTY 3..........I didnt mind paying full price for CALL OF DUTY 4 that game was worth it.  Any other I buy used off some dumb *** that pay full price for it and then sold it for less than half of what he payed for.

Answer 2

True.  They charge a high price to those who are willing to pay, ie those people who camp out in front of their local Best Buy for a week before the console comes out.  They do this because these people are somewhat price insensitive, so they can get a lot of revenue from them.  Then they lower the price to encourage more price sensitive people, such as families, to buy the console.  This two tiered pricing system is the definition of price discrimination.

Answer 3

False, of course.  First adopters always are willing to pay a premium in order to get first crack at a product, so they will pay a premium.  As satisfaction is fulfilled, the price must be lowered to maintain demand.  This is simple economics, not "discrimination."