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Who wrote this?

John Stuart Mill.

This has changed since 1848 only in that the merchant has posted prices, and does not usually charge a different price to Lady Bountiful and to the shop-girl from down the street; but coupons have much the same effect.

For years, you could get the local cider in half-gallons at two stores across the street from each other; their prices differed by $2, and continued to do so. The situation has changed only because one company sold their store to new management, who ran it into the ground by not paying their suppliers; but it was stable before that (and the one that went out of business had the lower price).

For another example, the library in which I type this sells two types of flash drives: ($10, capacity 2 Gb) and ($13, capacity 2 Gb, with a pretty logo of the Office of Information Technology in the school colors). I inquired, and found
  • This is not product differerentiation. They have sold one of the $13 flashdrives, and that was a time when they were out of the $10 ones.
  • OIT used to supply flashdrives, with their logo, all over campus for $13; when the Crunch came, two years ago, they told the library to get their own. The library found they could get plain flash drives cheaper; the $13 stock is what they have had for two years.
  • The student body appears to buy OIT. Presumably they don't know the library has the cheaper version.

In short, market forces work, when there is a market; but often there isn't one. Having a market requires transparency; which may explain why our loudest worshippers are generally opposed to transparency.