Tim Harford
Discover the hidden economic logic behind your morning cappuccino, the strategic placement of organic bananas, and the reason you can never find a decent used car.
Bargaining power often comes from controlling a scarce resource, whether it is a prime retail location, unique skills, or scarcity created through legislation.
Companies use price-targeting strategies to sort more and less price-sensitive customers, often through premium options or selective discounts.
In a competitive free market, prices can coordinate complex information about consumer priorities and production costs.