Multiple product qualities in monopoly: Sailing the RMS Titanic into the economics classroom

ABSTRACT

In this pedagogical contribution the authors extend the traditional three-class tariff employed in the French passenger railway system with the more resonant story of the service quality variations associated with the three passenger classes of the ill-fated RMS Titanic. In doing so, they provide economics instructors with an opportunity to integrate the well-known motion picture Titanic (Cameron and Landau 1997) into the teaching of economics. This article provides instructors with resources that can be used to link historical and modern travel examples of price discrimination in order for students to reach a “deeper understanding of course concepts” (Salemi 2002, 725).

KEYWORDS:

• economic education
• economics in the movies
• monopoly theory
• product differentiation

JEL CODES:

• A20
• A22
• B10
• D42
• L12
• L92

Notes

1. Information in this section can be located in the following Web sites: www.ultimatetitanic.com/construction/#.WKtRo2NcN8E; www.titanicuniverse.com/titanic-history; www.titanicandco.com/iceberg.html; www.history.com/this-day-in-history/titanic-sinks; www.titanicfacts.net/titanic-victims.html.

2. In order to provide stability to the Internet sources, these are the links to the YouTube videos and the actual movie times where the scenes can be found: (“You Going to Cut Her Meat too Call” https://www.youtube.com/watch?v=Phm9wbFAbp0. Movie scene found at 33:31); “First Class Dinner” (https://www.youtube.com/watch?v=oklPl95DC8c. Movie scene found at 1:02:18); “Third Class Dance” (https://www.youtube.com/watch?v=erAQ9LkftwA. Movie scene found at 1:07:49); “Pass as a Gentleman” (https://www.youtube.com/watch?v=rNjQgZvaMT0. Movie scene found at 58:28).

3. Spot prices for future cruises provided by NCL and other carriers are available at www.cruisefish.net. The quantities presented along the x-axis in figure 2 are chosen for consistency with the occupancy data provided in Wright (2013).