Editing Price discrimination (section)

==Png taxonomy==
The first/second/third degree taxonomy of price discrimination is due to Pigou.<ref>{{Cite book |last=Pigou |first=Arthur Cecil |author-link=Arthur Cecil Pigou |url={{google books|plainurl=y|id=9tM8PgAACAAJ}} |title=The Economics of Welfare |date=1929 |publisher=Transaction Publishers |isbn=978-1-4128-3667-8 |language=en}}</ref>   However, these categories are not mutually exclusive or exhaustive. Ivan Png suggests an alternative taxonomy:<ref name=":42">{{cite book |last1=Png |first1=Ivan |title=Managerial Economics |date=1998 |publisher=Blackwell |isbn=1-55786-927-8 |edition=1st |location=Malden, MA |pages=301–315}}</ref>

* Complete discrimination: seller prices each unit at a different price, so that each user purchases up to the point where the user's marginal benefit equals the marginal cost of the item;

* Direct segmentation: seller conditions price on some attribute (e.g., age or gender) that ''directly'' segments the buyers;

* Indirect segmentation: seller relies on some proxy (e.g., package size, usage quantity, coupon) to structure a choice that ''indirectly'' segments the buyers;

* Uniform pricing: seller sets a single price for each unit of the product.

The hierarchy{{snd}}complete/direct/indirect/uniform pricing{{snd}}is in decreasing order of profitability and information requirement.<ref name=":42" /> Complete price discrimination is most profitable, but requires the seller to have the most information about buyers. Next most profitable and in information requirement is direct segmentation, followed by indirect segmentation. Finally, uniform pricing is the least profitable and requires the least information about buyers.