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Explaining the soft-drinks tax

Big data and personalised pricing

Imagine you are purchasing a product online. You click on the item and see a brief description along with the price. Your friend is looking at exactly the same item from the same online shop, but they see a different price. How is this possible and what are the economic implications? Jon Guest investigates

Personalised pricing is where firms charge different customers different prices for the same or similar product.This is due to variations in their willingness to pay (WTP) rather than any differences in the costs of supply (i.e. retailers passing on lower costs of delivering to local consumers). With personalised pricing, consumers with a higher WTP pay a higher price and vice versa.

You can find answers to the questions in this article at www.hoddereducation.co.uk/economicreviewextras

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Explaining the soft-drinks tax

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