The preceding chapter maintained that negative pecuniary externalities can occasion economic compulsion by the nature of market exchange itself. This chapter goes a step further by arguing that such collateral coercive burdens inflicted by market operations are often skewed in their distribution. Pecuniary externalities merit closer scrutiny because not only are transaction costs different across individuals, they are in many cases regressive. In other words, the incidence of harmful unintended consequences mediated through the marketplace often falls disproportionately on the very people who can least afford to bear them. There are at least three reasons for this phenomenon, namely: variations in personal capabilities, wide disparities in the communal valuation of personal endowments, and differences in the private cost of accessing commodities due to people's dissimilar sociohistorical location. Each of these is examined in what follows. But first, it is necessary to lay out the formal theory undergirding these three factors.

THE THEORETICAL FRAMEWORK: THE MARKET AS AN EFFECTIVE PRICE DISCRIMINATOR

Price discrimination occurs when a seller charges consumers different prices for the same good or service. This practice is possible only if sellers are able (1) to distinguish buyers from each other and (2) to prevent resale among consumers. The most well-known example, of course, is the pricing of plane tickets. By imposing restrictions, such as Saturday-night stayovers and advance purchases, airlines separate business travelers from tourists and charge the former much higher prices than the latter.