> but remember that the big price-insensitive customers pay for the price-sensitive customers

The fallacy is thinking that the alternative is for everyone to pay the lower price and get the enterprise features.

In reality, without market segmentation a singular price for everyone would fall much closer to the enterprise price than the non-enterprise price.

You can call it an SSO tax, but it would be equally correct to refer to the lower price as the non-corporate discount.

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mr_toad 2 days ago | parent | next [-]

> In reality, without market segmentation a singular price for everyone would fall much closer to the enterprise price than the non-enterprise price.

That totally depends on the relative elasticity of supply and demand.

It’s not very intuitive, but price discrimination (usually) results in too much demand for a good/service and a deadweight loss of consumer surplus. In the worst case scenario all consumer surplus can be arrogated to the producer, and an extreme oversupply of the product. Imagine a cheap drug that could be sold for whatever amount of money the consumer had available.

	▲	foota 2 days ago \| parent \| next [-]
		Price discrimination allows producers to capture consumer surplus from consumers with a greater WTP than the otherwise price, and to offer the product at a lower price to those with a lower WTP. In a monopoly, this means that the quantity supplied may be greater, but it would still be no greater than under perfect competition (necessarily so since the monopolist would never offer the product at a lower price than their MC, which is where price would be under PC). You can see this because there is no consumer that would buy under price discrimination that wouldn't buy under PC, and everyone with a WTP greater than MC buys either way. Anyway, I agree that price discrimination results in the producer capturing more consumer surplus, but it can potentially be beneficial for those with a lower WTP in return for hurting those with a higher WTP.
	▲	mercutio2 2 days ago \| parent \| prev [-]
		There are many arguments I've heard about price discrimination being annoying, but deadweight loss is not one of them. Quite the opposite, fixed prices in the presence of undeserved pricing power results in a less than socially optimal amount of production, and price discrimination tends to reduce that. To say nothing of the implicit argument that software service providers have undeserved pricing power; I think that's begging the question, but it's not really relevant to my quibble here.

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2 days ago | parent | prev | next [-]

[deleted]

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cj 2 days ago | parent | prev [-]

Are you saying companies should provide a discount for not using SSO?

Or charge everyone the enterprise price to remove segmentation altogether?

Edit: I think I see what you’re saying. Although you’d likely welcome the same criticism if you refer to it as the non-corporate discount.

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YetAnotherNick 2 days ago | parent | next [-]

> Although you’d likely welcome the same criticism if you refer to it as the non-corporate discount.

Why? eg no one questions students discounts.

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j45 2 days ago | parent | next [-]

Nor question non-profit discounts, or even startup discounts.

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cj 2 days ago | parent | prev [-]

I’m not saying it’s a bad idea.

Only saying it won’t satisfy the people who don’t like the “SSO tax”.

There’s no difference between giving someone a discount vs. charging them less in the first place without a discount.

It’s semantics. It wouldn’t actually change what people end up paying at the end of the day. It’s just framed as a discount instead of an upsell.

Like if airline charged first class prices, but gave a “discount” for accepting an economy seat. (Same thing, just framed differently)

	▲	rexer 2 days ago \| parent [-]
		Framing is everything, though. See complaints around Tesla pricing for the same battery hardware with different software.

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TylerE 2 days ago | parent | prev [-]

Why not? Just like some companies offer discount plans that come with no/very limited tech support, and others charge 10 or 20x for the same product bundled with a high level of support.

	▲	wkat4242 2 days ago \| parent [-]
		Most of the big players like Microsoft charge enterprise customers for support on top of everything else. And this "premium support" still sucks. Microsoft outsources to Accenture who then outsource again to some random dopey small companies in the middle East so you get calls in the middle of the night from Qatar by someone who has no more knowledge than what the docs say. Which you've already read yourself otherwise you wouldn't have gone through the hassle of logging a ticket. Because outsourcing causes barriers between the people who built the thing and the people who support it. In most of these cases we either give up because the support is so useless, or someone high up calls Microsoft and gets the case escalated away from Accenture to someone in Microsoft who actually knows something. Personally if I were a CIO I would really be pissed at having to pay for this kind of "support". But yeah these guys rub shoulders with Microsoft all the time who tell them it's all amazing.