Arnold Kling, a high school economics teacher, justifies Black Friday and many other things through price discrimination. He cites this concept as very prevalent and a concept "deserv[ing] a lot more attention".
Temporary sales are a method of price discrimination to collect sales and profits from buyers that normally wouldn't purchase certain items at higher prices. Black Friday is the most important day of the year for these temporary sales. As with almost everything, there are those people that are willing to buy certain products at a price that most would consider high. There is also at least one group of buyers that will only buy those same products at a bargain price.
Sellers must make trade-offs regarding temporary sales. A temporary sale is great because it allows a seller to collect profits from the group of buyers that are "price-sensitive" and only buy at bargain prices. These sales can also sacrifice profits because the "price-insensitive" group that would have paid more can now purchase products for less, reducing profits from this particular group. Kling points out in his article that the great part of Black Friday is that the crowds generally discourage buyers that are "price-insensitive" from taking advantage of bargain prices. The negative externalities from large crowds maximizes profits from both groups, price-sensitive and price-insensitive buyers, to a greater extent than during other temporary sales. It is a big win for retailers that take advantage of this simple form of price discrimination.
To access the article, click here.