Behavioral Game Theory

Evidence (albeit somewhat anecdotal) suggests than women are being asked to pay considerably more than men for almost identical consumer products. This seems to apply to clothing, toiletries, toys, even pens. Why? It is hard to believe that it costs more to produce products for women than men. So, I think we can safely discount the idea that the difference is being driven by costs. The far more likely explanation is price discrimination.       To illustrate consider a very simple example. Imagine you are the owner of a company making jeans. It costs £25 to produce a pair of jeans and you are currently selling them at £50 a pair. At this price you sell 100 a week to men and 50 a week to women. The key question you have to consider is what would happen to sales if you increase (or decrease) the price? Suppose that at a price of £55 a pair you estimate you would sell 80 to men and 45 to women. On the male side this is a bad deal because profit falls from (50 - 25)(100) = £2,500 to (55

On Saturday rail fares in the UK rose by an average of 1.1%. This is the latest instalment in a long running trend of fair increases. Indeed, average fares have risen by around 40% over the last decade. As usual passengers were queuing up to say how disgraceful it all is. This year the opposition leader Jeremy Corbyn joined the fray with his standard call for a renationalisation of the railways. But what is the problem with high rail fares?        The main reason I ask this question is one of revealed preference . At the same time as complaining about high fares, most passengers also complain about having to stand on over-crowded trains. Indeed, use of the railway has soared , with over 70% more journeys now than in 2002. Moreover, I don't think that anyone would seriously dispute that the UK rail network has just about reached the limit of its capacity in terms of the number of trains operating.         If a price rise is accompanied by a reduction in demand then we can sta