An ethical discussion on the price of private lessons.

[PerchloricAcid]

So, here's the question.
Is the idea of having a higher price for holding private lessons to extremely rich kids ethically correct?

"What are these private lessons you speak of?"

Spoiler:

By "private lessons", I mean lessons that some kids take because they (or, more often their parents) aren't satisfied with their grade in a certain subject at school. Some take private lessons due to absence from school, some because they have poor teachers and can't seem to understand the material by themselves, some are just too lazy to study alone and/or pay no attention at school whatsoever - the reasons are individual and various.
The basic idea of private tutoring is that the tutor tutor comes to the kid's home (or the kid goes to the private tutor's home), they sit together for a predefined period of time (45/60/90 min usually), and the tutor tries to make the particular lesson/subject/problem more familiar to the kid. I mean, it's as if your younger sibling asked you to explain them something you know well and it doesn't seem to understand. Obviously, private tutoring is done for money.
I felt the need to make this clear, as I'm not sure whether such a concept even exists in other parts of the world - the educational system and other factors vary between countries.

If the standard price is, say, 100 arbitrary units, is it correct to ask for more from a family who, say, has so much money that they wouldn't even realize that they lost 1000 arb. units of money on the street?

At first, I had kind of a Robin Hood approach to this topic (so I'd say "sure it is"). My basic thought was that asking for 150% or 200% of the standard price doesn't make almost any difference to the extremely rich person, but definitely makes a difference for the tutor. So, I figured, no harm to the rich person, but means a lot to the person of average wealth.

However, after a recent conversation, I'm having second thoughts.
a. It is the same as if richer people would be obliged to pay more for, dunno, pizza, drinks, sneakers, computers, chairs, whatever. That surely doesn't sound correct.
(Then again, they might be paying that money to a big corporation that already has a looot of money, but the private tutor does not, so that might be a counter-argument here. A weak one, though.)
b. I do basically believe all people should be treated equally. Asking for more from someone who has more, just because they have more, is definitely not equal treatment. (But, then again, the person who has more (as previously defined) wouldn't really feel that inequality. Also weak argument from my pow, however.)

Okay, people, I'm confused. Please elaborate your answer. I'm looking for good arguments, whatever side you're on.

The question in the poll is the bolded part of the post, but the original sentence was too long to be a poll question.
I enabled the option to change your vote, as I believe there may be people who will change their opinion after a fine discussion (whatever side they're on).

[mmmcannibalism]

Unless you're doing a general pay what you can type thing*, I would say its unethical to offer** a different rate of pay if you're not negotiating***.

*which implies you are also doing near free tutoring for poor students.

**but perfectly fine to accept a rich families additional pay they offer

***if you negotiate price during a first meeting, I would say its perfectly ethical to use the fact they are probably willing to pay more.

[Azrael]

Is the good here important? Isn't the ethical question more relevant to a non-specific good or service?

I ask because the question "Is it ethical to charge according to the means?" can be flipped around to ask if it's ethical to discount for those of limited means.

[PerchloricAcid]

*which implies you are also doing near free tutoring for poor students.

***if you negotiate price during a first meeting, I would say its perfectly ethical to use the fact they are probably willing to pay more.

* - I'd do that regardless of what I decide to do with the rich students. That is, if I asked for more from the rich students, I would tutor the poor students for "nearly nothing", but if I didn't ask for more from the rich ones, I'd still ask less from the poor ones, but not that much (near free) less.

*** - elaborate, please?



So, basically, my question is whether it's ok to ask for more from the RICH ones, and not ask for less for the poor ones (although I would do that without doubts anyway).

[Charlie!]

Unless you have a problematic information asymmetry (e.g. you're one of only 2 tutors they know, and they don't know how much things usually cost), this seems like a perfectly valid place to let the free market do its thing. Ask as much as you want, and if you're overcharging by their estimation they can just fire you.

If this isn't a free market situation it can still be ethical to mimic the price the free market would give - that is, even if you have some sort of power over the customer, it's still okay to increase the price some, but not more than they would be willing to pay if they knew all the details.

[mmmcannibalism]

*** - elaborate, please?

Lets say you will work for 15$ per hour at the least(for situations where its not being done with any sense of charity).

Normally when negotiating price, you might start at 20$ an hour. However, I see nothing wrong with starting at 30$ an hour because you know the family might be willing to pay that.

[Adam H]

Honestly, I don't even think it's ethically wrong to charge more for poor people than for rich people. Sure, you're a scumbag if you don't have a reason for charging them more (longer commute, scary part of town, more difficult material to teach, etc.). But ethics != niceness, I don't think.

I agree with everything Charlie said.

a. It is the same as if richer people would be obliged to pay more for, dunno, pizza, drinks, sneakers, computers, chairs, whatever.

Mmmm it's not the same. By charging rich people more, you are not obliging them to pay more. Big difference.

I do basically believe all people should be treated equally.

That's our fundamental disagreement I believe. People should not be treated equally - at least depending on your definitions.

So, basically, my question is whether it's ok to ask for more from the RICH ones, and not ask for less for the poor ones (although I would do that without doubts anyway).

You'll have to explain to everyone what the difference is. Suppose the poor people pay you X, and the rich people pay you Y, where Y>X. How can you say that rich people are paying more, rather than poor people paying less? Is X an advertised price? Or is there a middle class that is paying X or some middle price?

[Роберт]

I have trouble understanding what "pay more" means.

If a rich person pays an entire day's salary (say, 1000 USD) for tutoring services for the semester, is that more or less than the poor person who pays an entire week's salary (say 300 USD)?

[mmmcannibalism]

I have trouble understanding what "pay more" means.

If a rich person pays an entire day's salary (say, 1000 USD) for tutoring services for the semester, is that more or less than the poor person who pays an entire week's salary (say 300 USD)?

is 1000>300?

Its a question about charging people based on their ability to pay, so its obvious that more means more dollars.

[Adam H]

If a rich person pays an entire day's salary (say, 1000 USD) for tutoring services for the semester, is that more or less than the poor person who pays an entire week's salary (say 300 USD)?

More.

Sounds like you need the mathematics forum.

Arg, ninja'd!

[Роберт]

I have trouble understanding what "pay more" means.

If a rich person pays an entire day's salary (say, 1000 USD) for tutoring services for the semester, is that more or less than the poor person who pays an entire week's salary (say 300 USD)?

is 1000>300?

Is 1>7?

Should I phrase it another way?

Is it ethical to charge poor people a larger percentage of their income for the same service than you would rich people?

[Azrael]

Is it ethical to charge poor people a larger percentage of their income for the same service than you would rich people?

This is the essence of the question, although somewhat inverted from the original. The key problem being your ability to judge a family's income accurately so as to maintain a constant percentage.

If you're really so obtuse as to try to argue that $300 is or is not "more" than $100, you're in the wrong thread. Dollars are a quantitative valuation. In this case, "more" has a discrete meaning. Since we've all demonstrated an understanding of the difference between a flat fee and a fee base on some percentage of the customer's income, the pedantry is unnecessary if not somewhat absurd.

[Роберт]

Is it ethical to charge poor people a larger percentage of their income for the same service than you would rich people?

This is the essence of the question, although somewhat inverted from the original. The key problem being your ability to judge a family's income accurately so as to maintain a constant percentage.

If you're really so obtuse as to try to argue that $300 is or is not "more" than $100, you're in the wrong thread. Dollars are a quantitative valuation. In this case, "more" has a discrete meaning.

Obviously $300 is "more" than $100, for the common definition. I'm not being obtuse, and I agree that, in practice it would be hard to judge a family's income accurately.

Surely you get the point of what I'm saying, though. A dollar is not an ideal way of measuring utility. Biasing goods and services toward people with more money is not always the best thing from a utilitarian perspective.

In fact, I think it's clear why it could seem unethical to charge the same amount of money for tutoring poor kids as rich kids. You're essentially making good education a cheaper utility cost for rich people as it is for poor people, since $1000 is worth less to a rich person than it is a poor person. This is going to only aggravate the class gap, by making rich people more likely to be well educated than poor people.

Edited for typo, thanks big cheese!

[Azrael]

Surely you get the point of what I'm saying, though. A dollar is not an ideal way of measuring utility.

Thank you Captain Robert. This has been previously established as the topic of discussion without asking questions like:

I have trouble understanding what "pay more" means.

[Роберт]

Surely you get the point of what I'm saying, though. A dollar is not an ideal way of measuring utility.

Thank you Captain Robert. This has been previously established as the topic of discussion ...

You're welcome. (EDIT: Azrael had worded that much more nicely before I hit "quote"...)

I obviously don't have a clear cut answer on this, except that I believe yes, it's okay for someone to charge rich people more for private lessons.

[Azrael]

I obviously don't have a clear cut answer on this, except that I believe yes, it's okay for someone to charge rich people more for private lessons.

So, how about bread? And let's remove poverty, so the sake of eliminating a debate regarding what people do or don't feel about social safety nets:

It is ok to charge someone who makes 30X (where X is the appropriate poverty line for their living situation) more for a loaf of bread than someone who makes 3X?

EDIT: Also, is this income discrimination? Should income remain/become (varying by region) a legally protected attribute like gender or race? Do such legal protection only exist to protect those who lack the trait that is considered socially superior? I ask because I expect that there is a set of people who believe that such price variation (i.e. charge the rich person more) is ethical who would also support laws that prevent discrimination against people (i.e. protect the poor from discrimination based on being poor) -- and I'm curious about the interaction of these two views.

[Zcorp]

You can't really say something is ethical or not without having a goal in which you are trying to achieve. Different ethical perspectives would place this in different places ethically. Contemporary secular ethics would land this on the side of ethical as it tries to maximize human well-being on this plane of existence. That is assuming the extra expense to the rich kid didn't cause greater harm to society.

[Yakk]

To be clear, you do know that stores do exactly this.

Well, they try. There is this trick called price discrimination. You attempt to set up your business so that the people with a lower marginal sensitivity to prices will spend more for the same good as the people with a higher marginal sensitivity to prices.

The ideal method involves reading their mind and offering them a secret deal.

More practical versions include sales, loyalty cards, selling multiple types of good where the cheaper one is crippled in status, crippleware (and the physical equivalent), timing based systems, offering expensive upgrades with little marginal benefit to the consumer, etc.

Ie, imagine a system where you can stand in line for 30 minutes in exchange for 10$ off a purchase of 50$ or more, or take an express lineup and get no discount. For people whose time is worth more than 20$ per hour, they'll take the fast lane -- for people whose time is worth less than that, they'll burn the time in the lineup.

Another example of this is cars where you can pre-pay for the gas (or fill it up exactly to the same level). If you aren't price sensitive, you'll just pay to avoid the bother.

So yes, rich people pay more for bread. Their bread sometimes has additional features or status markers that says "this is rich people bread", but the rich people bread changes with the flows of fashion. (100 years ago, white bread => rich, now white bread => poor)

[Роберт]

I obviously don't have a clear cut answer on this, except that I believe yes, it's okay for someone to charge rich people more for private lessons.

So, how about bread? And let's remove poverty, so the sake of eliminating a debate regarding what people do or don't feel about social safety nets:

It is ok to charge someone who makes 30X (where X is the appropriate poverty line for their living situation) more for a loaf of bread than someone who makes 3X?

Sure. Why not?

[cazadoremi]

Maybe we should change the name of the thread from "An ethical discussion on the price of private lessons" to "A discussion on the ethics of income-based, sliding-scale pricing" or the equivalent.
I just clicked the link because I'm a teacher. I'd be interested to see what others think about the real topic at hand.

[Cheezwhiz Jenkins]

I obviously don't have a clear cut answer on this, except that I believe yes, it's okay for someone to charge rich people more for private lessons.

So, how about bread? And let's remove poverty, so the sake of eliminating a debate regarding what people do or don't feel about social safety nets:

It is ok to charge someone who makes 30X (where X is the appropriate poverty line for their living situation) more for a loaf of bread than someone who makes 3X?

EDIT: Also, is this income discrimination? Should income remain/become (varying by region) a legally protected attribute like gender or race? Do such legal protection only exist to protect those who lack the trait that is considered socially superior? I ask because I expect that there is a set of people who believe that such price variation (i.e. charge the rich person more) is ethical who would also support laws that prevent discrimination against people (i.e. protect the poor from discrimination based on being poor) -- and I'm curious about the interaction of these two views.

My guess is that someone might charge the rich person more but also want to protect the poor from similar discrimination because of something mentioned earlier. Price discrimination can/will hurt the poor person quickly, to the point where it will actually make them go hungry (or without some other essential: clothing, shelter, schoolbooks, whatever) at some point - but it's less likely/much slower to cause extreme want in a rich person. Of course, if you literally jack up prices for everything for the rich until they are just as hard to reach for both groups, that isn't a valid argument anymore, but I don't think anyone was talking about actually fixing prices such that everyone is essentially reduced to poverty (the absolute prices being irrelevant).

[Azrael]

Of course, if you literally jack up prices for everything for the rich until they are just as hard to reach for both groups, that isn't a valid argument anymore, but I don't think anyone was talking about actually fixing prices such that everyone is essentially reduced to poverty (the absolute prices being irrelevant).

Aww, you guessed the punch line. That's where I was going. Well that and playing the "but isn't that communism" card, slightly tempered with a question about entirely removing the idea of upward economic mobility.

It is ok to charge someone who makes 30X (where X is the appropriate poverty line for their living situation) more for a loaf of bread than someone who makes 3X?

Sure. Why not?

Well, what scale should we use? Linearly proportional? $30 instead of $3?

[Soralin]

Well if you go to the extreme, it gets sort of silly if everyone is charged just a % for everything. Since it means everyone can buy everything (x% * 0 = 0, which is eventually where you'll (asymptotically) end up if you just keep buying stuff), and money is pointless.

[lutzj]

It is ok to charge someone who makes 30X (where X is the appropriate poverty line for their living situation) more for a loaf of bread than someone who makes 3X?

Sure. Why not?

Well, what scale should we use? Linearly proportional? $30 instead of $3?

Pricing everything perfectly proportionately to the amount they have would eliminate any incentive to make more money. There's no reason people who can already afford most basic necessities should get significant discounts over those who have even more disposable income; discounts for the poor, on the other hand, are relatively easy to justify if the person selling feels charitable.

[Yakk]

There is lots of reason to charge someone who can afford it more. If you ask for 100x as much and the person says yes, that is 100 times as many reasons to ask for it.

If you need more customers, figure out the most you can charge someone (above costs, which can include how much you value NOT having to tutor someone) that they'll pay you. If you have 1 rich, 1 middle class, and 1 poor customer, better to charge them 100$, 10$ and 1$ per hour if that is what they'll pay you, and that you'd be willing to tutor for 1$ given your work load, than to charge them 10$, have the poor person unable to pay you (or unwilling), get 10$ from the middle class, and 10$ from the rich person. That is 111$ vs 20$, for 3 units of work instead of 2.

Now, you might decide that 110$ for 2 units of work is better than 111$ for 3 units of work, which is one reason why it sucks to be poor.

[Dark567]

Well, what scale should we use? Linearly proportional? $30 instead of $3?

Once we have established that its okay to charge the rich person more, it's up to the seller to decide how much more without ethical boundaries. Basically they should be able to charge up to as much as the rich person will pay.... or not and lose the business.

[TheGrammarBolshevik]

At first, I had kind of a Robin Hood approach to this topic (so I'd say "sure it is"). My basic thought was that asking for 150% or 200% of the standard price doesn't make almost any difference to the extremely rich person, but definitely makes a difference for the tutor. So, I figured, no harm to the rich person, but means a lot to the person of average wealth.

This same logic would work for a real Robin Hood situation: If I steal $1000 from Bill Gates, it's hardly going to make a difference to him, but it would be quite useful for me. But you probably don't want to say that it would be OK for me to rob Bill Gates, or, more generally, that it would be OK for anyone to rob anyone with more money than her. So, this atomistic utilitarian approach is not the way to go. It doesn't just matter how much you're helping and hurting people, but why and how you're doing it.

a. It is the same as if richer people would be obliged to pay more for, dunno, pizza, drinks, sneakers, computers, chairs, whatever. That surely doesn't sound correct.

It wouldn't be right to obligate rich people to pay more, but an offer from a tutor is not an obligation. If I, as a hypothetical tutor, ask for a higher fee from a rich family, they're quite at liberty to tell me to fuck off, and either find a cheaper tutor or forego tutoring. Many tutors would be happy to take my business simply by charging their ordinary fees. Likewise, if a store behaved this way, requiring that wealthier people pay more for goods, that store would simply lose all its business from its wealthy clientele.

This assumes, of course, that there isn't a monopoly on tutoring, but that isn't implied by any of the considerations in the OP, so I'm assuming that it's not in play.

b. I do basically believe all people should be treated equally. Asking for more from someone who has more, just because they have more, is definitely not equal treatment.

It's not clear to me what you mean by equal treatment. On a straightforward, literal interpretation of equal treatment, clauses like "just because they have more" aren't relevant: If I treat someone differently because she has more money, or I don't like the way she looks, or I've caught her shoplifting in my store before, or we're friends from way back and I want to give her a discount, I'm still treating them differently, not equally. But you probably don't mean "equal treatment" in this sense, since you probably don't think that there's anything wrong with treating people differently for the second two reasons, and you think that a consideration like "just because they have more" does make a difference.

But if some reasons for treating people differently are OK, while others aren't, you need some way to tell the difference. Saying "It's wrong to charge rich people more because it's wrong to treat people differently for being rich" simply begs the question.

Also keep in mind that it makes a difference who is treating people differently. I can treat my friends differently from other people; however, a government should not care who my friends are, much less have friends of its own (and a government can still certainly treat shoplifters different from non-shoplifters).

[AvatarIII]

a. It is the same as if richer people would be obliged to pay more for, dunno, pizza, drinks, sneakers, computers, chairs, whatever. That surely doesn't sound correct.

not sure if anyone has addressed this, i typed out a post about it last night on my phone but for some reason it didn't post, so i'm readdressing it.

basically my point was, although richer people aren't obliged to spend more on these things you listed, they often do because they can,
sneakers for example, say you could easily buy a pair of sneakers for 30 arb units, you could also buy a pair of nikes for example for 300 arb units, the nikes are not 10 times better than the cheaper ones, but people still buy them, because they can.
a person could buy a 500 arb unit computer and keep it for 4 years say, but a rich person might spend 2000 arb units every 2 years
someone might spend a couple of arb units on a frozen pizza, or make one from scratch, but a rich person might go to a restaurant and pay 20 arb units for a pizza.

rich people aren't obliged to spend more, but they probably do.

and so, they may be a few tutors out there charging wildly different prices, a rich person is not likely to go for the cheapest tutor simply because they would think "i can afford a better one" and "more expensive = better" even if "5 times more expensive /= 5 times better"

[Zamfir]

It wouldn't be right to obligate rich people to pay more, but an offer from a tutor is not an obligation. If I, as a hypothetical tutor, ask for a higher fee from a rich family, they're quite at liberty to tell me to fuck off, and either find a cheaper tutor or forego tutoring. Many tutors would be happy to take my business simply by charging their ordinary fees. Likewise, if a store behaved this way, requiring that wealthier people pay more for goods, that store would simply lose all its business from its wealthy clientele.

You can also look at it in terms of personal obligations that the OP as tutor might or might not want to accept for themselves. As part of a personal moral philosophy or professional ethic.

Under circumstances where you can charge a mark-up to customers, when should you do so? Always? Only if the tutee can easily afford it? Or should you try to charge wealthy customers as much as possible, because it's unfair that they can afford more tutoring? What if you can charge more because the tutee isn't aware of the cheaper competition? If they are panicking? Or overestimating your skills? Does that carry an obligation on you to be honest about your skills and the likely results? there are people who say that you can charge as much as can get away with, but that's hardly the only possible view.

And then you get the flip side: if you can charge more to certain people, should you focus on them? Or should you try to mix, tutor some richer clients who pay more, but also tutor people who cannot afford the price you could earn from others?

[quantropy]

I can't see any reason to charge more for tutoring rich people.

1: If tutoring was a necessity (like medical treatment), then you might feel obliged to make it available to the poorer sections of society. But they can always ask an older sibling or make do with the schooling they get for free.

2: Price variation makes some sense when your variable costs are low, and most of your costs are fixed costs. But the cost of tutoring (your time) is pretty much all variable cost.

3: A well known scientist might charge huge amount to tutor those who will pay (well, why not), and might also (being a nice sort of person) tutor poorer kids for free, but these would be incidental to their main job

4: If you are looking for tutoring work, it seems reasonable to be expected to state what your rates are early on - being evasive about this would be likely to put off customers.

[Yakk]

I can't see any reason to charge more for tutoring rich people.

Because you get more money if you do isn't a reason?

2: Price variation makes some sense when your variable costs are low, and most of your costs are fixed costs. But the cost of tutoring (your time) is pretty much all variable cost.

The fixed costs of tutoring are ridiculously high -- the decade+ of education to get you to the point where you could tutor someone.

On top of that, advertising costs are not variable (finding people to tutor).

4: If you are looking for tutoring work, it seems reasonable to be expected to state what your rates are early on - being evasive about this would be likely to put off customers.

That depends on the local supply:demand ratio. If there is lots of supply, then it is a buyers market. In a sellers market, it makes lots of sense to be evasive, as putting off some customers still leaves you with lots (enough to occupy yourself with), and you can engage in price discrimination if you aren't up front about your prices.

Now, if you need justification, that isn't hard. You could offer in-house tutoring for more than at-certain-location tutoring. You could offer more time flexibility, or more time commitment, for a premium. You could do a mixture of group and one-on-one tutoring, charging less for the group sessions. But in practice, the above is only "needed" at scales larger than you will be operating.

[quantropy]

In a sellers market, it makes lots of sense to be evasive, as putting off some customers still leaves you with lots (enough to occupy yourself with), and you can engage in price discrimination if you aren't up front about your prices.

But doesn't it make more sense to set high prices for all - and high prices might be taken to signal higher quality - and so lose those customers who weren't willing to pay that much, rather than those who might be willing, but are put off by your evasiveness?

[Роберт]

It is ok to charge someone who makes 30X (where X is the appropriate poverty line for their living situation) more for a loaf of bread than someone who makes 3X?

Sure. Why not?

Well, what scale should we use? Linearly proportional? $30 instead of $3?

Why not think even bigger? If they are 4 times as rich they pay 6 times as much? Kind of like income taxes?

Of course, if you literally jack up prices for everything for the rich until they are just as hard to reach for both groups, that isn't a valid argument anymore, but I don't think anyone was talking about actually fixing prices such that everyone is essentially reduced to poverty (the absolute prices being irrelevant).

Aww, you guessed the punch line. That's where I was going.

Of course, the punch line was pretty obvious. In all seriousness, if their was anything like price-fixing going on, or something that made it more like a monopoly, I would be more worried.

Something in between the same cost and the same %, weighted toward same cost, is what I imagine would (and does) happen.

My real problem with charging more for rich people than poor people for something as vital as education is that it will tilt the supplier toward wanting more rich clients than poor clients, another way of increasing the class gap. So charging equal prices contributes to the class gap, but charging different prices could also contribute to the class gap.

Anyway, in a more ideal world, everything would be a sort of "pay what you can and think is reasonable" thing. But if someone sees a shirt they think is worth $40, and the price is $10, guess what? They aren't likely to pay $25 for it.

[cphite]

As long as you're being up front about what you're charging, it's really up to you. Name your price. If they're willing to pay it, they'll pay it - if they're not, they'll go find someone else. What you happen to be charging some other family for the same type of service is frankly none of their business, and has nothing to do with your arrangement.

[TheGrammarBolshevik]

there are people who say that you can charge as much as can get away with, but that's hardly the only possible view.

Not only that, but a weakness of the position I gave above is that I was basically saying "It's fine if it doesn't work." That is, I said that it's less clearly OK to raise your prices if you have a monopoly — but if you don't have an effective monopoly, how can you expect to make money by raising prices above your competition? Something that's only OK to try if you know that it won't succeed is probably just something that you shouldn't try.

[Zamfir]

Well, you don't even need a full-scale monopoly. Almost every well running business has some amount of pricing power, especially services. Razor-sharp defined market prices are more for commodity markets or financial stuff. If, say, someone comes to you because you were recommended as a tutor or because they liked you last year, you can easily charge a few bucks an hour more before they start looking for competitors. Same if the nearest competitor lives 10 miles down the road. Even if those competitors are really just as good as you.

Half the skill of running a business is to create that kinds of opportunities, to get in special positions where you're a bit sheltered from competition and can make a buck. But there is sometimes a thin line between having good business skills and being good at screwing people over, especially if the people you deal with aren't sharp professionals.

So, yeah, it's a dubious practice when people rely on the panglossian perfectian of the market to protect them from being jerks.

[Роберт]

there are people who say that you can charge as much as can get away with, but that's hardly the only possible view.

Not only that, but a weakness of the position I gave above is that I was basically saying "It's fine if it doesn't work." That is, I said that it's less clearly OK to raise your prices if you have a monopoly — but if you don't have an effective monopoly, how can you expect to make money by raising prices above your competition? Something that's only OK to try if you know that it won't succeed is probably just something that you shouldn't try.

A monopoly is more like they have to choose you.

Being willing to pay for your service because they think you're that awesome is not the same as a monopoly.

[TheGrammarBolshevik]

Good thing I wasn't talking about them being willing to pay me because they think I'm awesome, then.

[Роберт]

Good thing I wasn't talking about them being willing to pay me because they think I'm awesome, then.

I guess I'm confused, then, what were you saying about it being like a monopoly?

[lutzj]

Being willing to pay for your service because they think you're that awesome is not the same as a monopoly.

If you charge somebody more than you normally would, you are relying on 1) having a monopoly, 2) having some quality advantage over your competitors (convenience, or maybe prestige) that prevents them from simply going to another teacher, which means you effectively have a monopoly on service of that quality, or 3) relying on them not knowing that you are charging more than the normal rate, which means you have an effective monopoly with this family because they are not aware of other people providing the same service for less.

Even if you don't have a true monopoly, charging more because you think you can get away with it relies on the same exploitative aspects of one.