User:Anguswalsh109/sandbox

Drip Pricing

Economic Effects
Even under the circumstances of fully rational consumers and suppliers, consumers are harmed for industry benefit. The main discredit of this strategy isn't firms using this tactic in order to gain an advantage over other firms, but rather it increases the "consumer's cost to searching elsewhere".

Search friction inhibits consumers from obtaining sufficient market information to make an informed decision, an effect which is amplified by drip pricing. When drip pricing is employed, a competitive market is insufficient to mitigate the additional search friction consumers experience. Drip pricing is a method used to isolate and restrict competitive forces to the base price only, with minimal competition influence on additional charges.