I have been doing a bit of research on price discrimination, but I haven't found exactly what I am looking for. I thought perhaps someone out there could help, or better yet, has experience in the matter.

Here is the situation. Let's say there is some kind of event, for instance a baseball card collectors convention. The guy who is ultimately in charge of organizing the convention (I will call him Bob) makes a deal with the hotel (the venue of the convention,) such that anyone who stays at that particular hotel while attending the convention gets discounted rooms. In order to persuade people to stay at that hotel, Bob charges $100 to people attending the convention if they stay at the hotel, but $150 to anyone not staying at the hotel.

So, basically if you could find a better deal on a hotel nearby, or commute from home, you are getting screwed for not taking part in Bob's "deal".

I find this practice highly unethical, but my question, is this practice legal? I totally understand why Bob is doing this. Most likely he has promised the hotel a certain number of rooms will be filled, and they have thus offered him a discounted rate. So in order to make good on this promise, he makes it more cumbersome financially on anyone who doesn't take him up on this deal.

Thanks for reading, and for any constructive response, including links.

2/11/2011 2:30:27 PM

I do not know any particulars about the legality concerning this practice. However, I'm sure that we've all experienced offerings such as "Show your room key from blah-blah and you'll get blah % off of your bill." Perhaps the legality has to do with how the offer is worded?

2/11/2011 2:33:38 PM

Yeah, You usually see it the other way around... ie. The convention is $100 for everyone, but rooms are $50 cheaper if you are attending the convention

2/11/2011 2:39:37 PM

Seems perfectly ethical...not to mention legal. Price discrimination exists everywhere.

Senior discounts
student discounts
quantity discounts
discounts with ticket stubs
hell, haggling with a vendor could be seen as a form of price discrimination

2/11/2011 2:41:16 PM

^^ well those conventions have a better organizer than Bob

2/11/2011 2:41:41 PM

legal, ethical

2/11/2011 2:42:14 PM

the most common form of price discrimination: coupons

2/11/2011 2:44:57 PM

^^

2/11/2011 2:46:39 PM

Ethical.

2/11/2011 2:46:57 PM

Why would you think it wasn't legal?

2/11/2011 3:31:50 PM

i don't have a problem with this scenario

2/11/2011 4:32:25 PM

legal.

2/11/2011 4:35:20 PM

how is he checking that you are staying at the hotel?

2/11/2011 4:39:17 PM

Quote :

"Why would you think it wasn't legal?"

I don't know. To be 100% honest, it's probably just me bitching. The scenario in question isn't a baseball card convention, but it is something similar that I participate in on a regular basis. It's a competition that I go to, and I end up paying a higher entry fee than the other people because I happen to live closer and am able to commute.

2/11/2011 4:47:52 PM

you also don't have to pay for a hotel room though. i'm assuming the gas to get you there is cheaper than the hotel room would be.

2/11/2011 5:01:30 PM

yeah it's legal.

[Edited on February 11, 2011 at 5:27 PM. Reason : .]

2/11/2011 5:27:34 PM

Quote :

"you also don't have to pay for a hotel room though. i'm assuming the gas to get you there is cheaper than the hotel room would be."

You are absolutely right. I just don't feel like I should be penalized because of this fact. In my opinion, it would be like telling the people who either lived on campus or rode the Wolfline that, since they didn't have to pay for parking like the rest of the student body, their tuition would be 5% higher.

Like I said, I know it sounds like I am just bitching (which I am), I was just checking with my number one source for everything (TWW) whether or not this was kosher. I was pretty sure it was, but honestly, the organization that I am referring to does have a lot of other very questionable policies and practices, so it would not be beyond them to blatantly violate anything.

Thanks again for the replies.

2/11/2011 6:21:32 PM

have you tried straight up asking for the discounted rate? it is legally questionable they may be able to get away with it by offering the discount to anyone that asks for it, even if it is not advertised as such.

i don't know, just a thought and it can't hurt to ask.

2/11/2011 11:09:50 PM

Quote :

"You are absolutely right. I just don't feel like I should be penalized because of this fact."

You aren't being penalized, they are being rewarded. Also you're still coming out ahead because you don't have to pay for a hotel room. I bet if you were in the other guys' shoes you would be complaining that these local chumps can compete for cheaper because they don't have to pay for a hotel.

You might as well complain about people who use coupons as well.

[Edited on February 11, 2011 at 11:34 PM. Reason : .]

2/11/2011 11:32:44 PM

How could this possibly be illegal? Are business not allowed to give discounts and coupons?

2/12/2011 2:55:18 AM

Wow, I'm surprised someone living in the USA would consider this illegal or unethical. In a communist state, then maybe yes.

Bob has to commit to a certain # of rooms to get a discounted price to pass on to attendees, and probably to help pay for the convention space.

2/13/2011 7:35:05 PM

Well, like I said, I didn't really "think" it was illegal, I was just checking. There are a lot of laws and regulations protecting the consumer. Eharmony is not allowed to cater only to straight people. Barber shops have gotten in trouble for refusing to cut the hair of a certain race (not because they didn't want to, simply because the place had only ever cut African American hair and had no experience with non-afro hairstyles). There are about a billion examples, and I am definitely not comparing my circumstance to racial or sexual preference equality. I am simply saying that there are a lot of rules out there to protect the consumer, that if I had not heard of, I would not think they existed.


In all seriousness, how would you feel if NCSU started charging a "non-parking" fee to anyone who did not commute? It would probably piss you off, because you had made the conscious decision to live on campus and not have a car, and now you are being penalized for it.

But seriously, it's not that big of a deal to me. I was just asking the question to see if anyone had any experience or insight on similar matters.

2/13/2011 9:24:54 PM

They already charged plenty of fees for services I never used.

2/13/2011 9:28:18 PM

please guys, he has a match tonight

[Edited on February 13, 2011 at 11:57 PM. Reason : oh hai we are in lounge ]

2/13/2011 11:57:40 PM

I don't see how it's any different from hotels giving customers discounts to their buffets or nightclubs.

That said, if, as I suspect, this has to do with poker tournament buy-ins, and these poker tournaments are a big source of income for you, I can see how you might be frustrated with the process. In poker, you are trying to do everything you can to maximize your odds, but the deck is stacked against you from the start (due to higher buy-ins than the rest of the competition). I'm sure that would suck, but I don't believe it is illegal. Ethics are a different story, but we could talk a lot about the ethics of professional poker, which some consider to be a deceitful endeavor at it's heart. I wouldn't go bitching about ethics unless someone actually cheats.

[Edited on February 14, 2011 at 2:07 AM. Reason : 2]

2/14/2011 2:06:59 AM

Quote :

"you are getting screwed for not taking part in Bob's "deal". I find this practice highly unethical, but my question, is this practice legal"

I think I heard about some lawsuit over "ladies night" specials at bars & clubs as price discrimination, but that the case was lost or thrown out or something. Seems like there is a pretty high bar to qualify as illegal price discrimination rather than just incentivizing the kind of crowd you want.

2/14/2011 4:36:57 AM