Differential pricing is the art of charging customers not what it cost you to make the product but rather the maximum amout that reflects the value the buyer thinks he will extract from using that product. Sellers sometimes call this “value pricing.” This black art requires – if your the seller – getting the buyer to reveal his perception of how much use he will get from the product.

For example a hotel or an airline will tend to charge more for a room/ticket the closer to the event it gets – the theory being that your need for the room/ticket is more urgent.

Ok. Let’s play the game. You want to buy a local phone for your apartment. You don’t plan on using it very much, in fact maybe not at all. How low a price can you pay to get the service?

A young acquantance of mine recently managed to get it down to $23.50. My friend doing volunteer service as part of Citiyear Chicago her total income the stipend they provide is $200/week.

The AmeriTech web site. To play this game you may need some some secret codes: you live in Illionis, and your area code is 773 and your phone might be in the 472 exchange. Good luck!