PRICE DISCRIMINATION AND THE CELESTIAL JUKEBOX (COMMENT).

PRICE DISCRIMINATION AND THE CELESTIAL JUKEBOX (COMMENT). I am not surprised that Annalisa and Lee are indignant at the idea of paying a royalty each time they listen to a song on an iPOD (and, yes, Annalisa, as I understand the theory of the Celestial Jukebox, you would have to pay a royalty each time you watched a favorite movie on a DVD). If the Celestial Jukebox technology is achieved, it would allow the copyright holder to do something sellers try to do whenever they can—to charge a higher price to consumers who value the product more. Economists will call this price discrimination. (Economics has a number of misleading names for things. “Price discrimination” is one of the most misleading because “discrimination” now suggests unfair harm.) Price discrimination consists of charging different prices to different customers. Examples of price discrimination that economists will give include lower prices for seniors, higher prices for hardbound books before they come out in paperback or higher prices for first run movies.