Static monopoly price discrimination. Couponing is a canonical example of price
discrimination.See , for example, Pindyck and Rubinfeld (2 000) and Carlton and Perloff (2000).
A monopolist may profitably charge discriminatory prices if he can separate consumers with
different elasticities. If only more price-sensitive customers bother to clip,save,and use coupons,
manufacturers can use coupons to sort customers into groups with distinct price elasticities.If
a monopolist can separate its customers in to two groups,it will charge the group with the less
elastic demand a higher price than the group with the more elastic demand, and,under certain
assumptions,the less elastic group's price will be (weakly) higher than the uniform price.