1、PRICE DISCRIMINATIONBEHIND “COLLECTING LIKES FOR CASHBACK”Page2Figure 1A monopolistic competitive marketTriangle ABEIndicates the deadweight loss at PMMC=MRWhen monopolists maximize their profitsTriangle CPMBIndicates the consumer surplus at PMTrapezoid PMOAB Indicates the producer surplus at PMEqui
2、librium Price P*and Q*Indicates the equilibrium reached in a perfect competitive market Page3WHAT IS IN OURWeChat Moments?Among the 358 questionnaires that we distributed online,98.7%of the respondents have seen friends collect likes in moments76.5%have received a message requesting them to like the
3、ir moments as soon as possible48.2%of them admit that they themselves have ever collected likes no less than twice.Page44 StepsHOW TO GET CASHBACKHoping your friends to like your moments and waiting for enough likesWAITINGAdvertising for the product and recommending your friends to buy it tooSHARING
4、Going to the shop to buy something you needCONSUMINGConnecting with the suppliers for your cashback with the screenshotCONTACTING SUPPLIERSPage5Introducing several variables and parametersTheoretical Analysis P denotes the final price of the good P denotes the original price M denotes the amount of
5、cashback M=N/(is a positive constant)N denotes the number of likes you collect Several Important VariablesAccording to the definition of Poisson distribution denotes the number of likes you collect in a unit of timeA ParameterP=P-M=P t/Calculation FormulaPage6Pt means time cost,i.e.the worth of the
6、consumers time Typically,the richer a consumer is,the higher his or her time cost is.Pt is positively correlated with wealthPeople whose time cost is higher will spend less time to collect likes,so they will receive less cashback.Pt is negatively correlated with m The conclusion is that richer peopl
7、e will receive less cashback,while poorer people who are sensitive to the price of goods will make more efforts to gain m.M is negatively correlated with wealthAmong these variables Internal relationshipsPage7We have construct the relationship between the time and price of different people.Now,to fi
8、nd the consumer surplus squeezed by sellers,we need to think about the revenue earned first Consumer SurplusTotal RevenuePage8PPMP*QPConsumer SurplusInfinitely Many PartsDifferent cashback results in different price.The consumer surplus squeezed by sellers is the sum of the area of all the rectangle
9、s shown in the picturePage9Two PartsConsumer SurplusConsumers with higher willingness:These consumers want to spend less time on like collecting,and the price paid is higher than PMSellers can set a high initial price closed to point C,and obtain consumer surplus of these peopleConsumer with lower w
10、illingness:These consumers are out of the market when sellers set the unified price at PMBut with the cashback,these consumers will enter the market，and their surplus will be squeezed by sellers Here,we regard total consumer surplus as two triangles approximatelyPage10On Aggregate Social WelfareEFFE
11、CTSBefore price discrimination,Total Social Welfare=Triangle CPMB+Trapezoid PMOAB CS=0PS=Trapezoid COAB+Triangle BDEAfter price discrimination,Total Social Welfare is increased by Triangle BDECS=Triangle CPMB PS=Trapezoid PMOAB Page11From a rational perspectiveCONCLUSIONWHICH TO CHOOSEThe definition
12、s of poor and rich are relative concepts,not absolute ones.Wed better have a comparison in mind whether the cashback is worth of the time you devote to.APPRAISALS OF PRICE DISCRIMINATIONFor the poor:Provide a better G&S at a lower price at a cost of timeFor the rich:Have more flexibility to decide whether to spend time for the cashbackPage12THANK YOUFor being here today
