Australia

why phone plans are crazy

It’s not a trap, it’s an example of price discrimination . At least, so says this Slate article. It’s from their “The Undercover Economist” columnist. If you think reading is boring, you can download it’s MP3 from here.Price discrimination is extremely common , it even explains why popcorn is usually more expensive at the movies than anywhere else, but it’s one aspect of economics most people have never heard of.

What’s “the Undercover Economist’s” bottom line on the confusion of phone plans?

” …(I)t’s a very simple screening device to spot customers with money to burn. If you don’t care enough about your phone bill to ask (a customer service representative) for a spot of advice, then you can obviously afford to pay a little more.”

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