Price discrimination as an incentive tool

http://nordic.businessinsider.com/after-saving-denmark-with-sex-spies-rejser-have-stepped-it-up-with-a-hilarious-new-campaign-and-a-perfect-price-discrimination-model-2016-11

The above article clearly represents how a travel agency used price discrimination to enforce a change in people’s behavior. Couples with babies tend to have sex less frequently. So, in order to benefit couples because of the positive effects of sex like decreasing stress, increasing life up to 8 years, improving the immune system, the travel agency provides vacation discounts to couples according to the number of babies they have. The travel agency is providing an incentive which is a crucial factor in determining a consumer’s decision. And, because of the discount, the couples are more inclined to have more babies (one of their objectives as Denmark has a high old-age population) and the couples will also have more sex because of the time they will spend on a vacation (another objective of the agency). Price discrimination can be clearly seen during the advertisement video when they show the discount they are offering to couples according to the number of babies (1, 2, and 3). Although, price discrimination is regarded mostly as a strategy sellers use to increase their revenue, we can see from the above article that it can also be used to influence and incentivize certain needs and laws which in this case is having healthy old people in Denmark and increasing the teenage population so that the welfare system can function properly.

2 Comments »

  1. Nicky Tynan Said,

    December 2, 2016 @ 4:53 pm

    The price discrimination works only if people with more children have a lower willingness to pay, which is likely because they need to use more of their income of childcare costs and will incur higher costs for childcare or to pay for children to travel with them.

  2. cortij Said,

    December 8, 2016 @ 3:52 am

    This is a good example of price discrimination where couples with more kids are given better discounts on travel vacations. You nicely point out how the discount creates a positive external of having more sex which improves the lives of people in Denmark and the well-being of the country as a whole.

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