The way I see it, pricing for market demand is fine, pricing for individual demand is not, particularly when the pricing is blind to the user.
It's already a bit strange when I'm on a plane and know the person sitting next to me paid 1/2 what I did, and they're aggressively stealing the arm-rest.
It's different when the airline says "we know you were looking for a flight on this day and time because you checked twice before buying a ticket, so each time you checked, we increased the price, because we figured you were more likely to buy.
This example has nothing to do with the market, it's strictly targeting me as an individual.
I had an experience with Uber where I cut myself and had to get stitches, so put my destination as a local hospital. Instant 3x surge pricing, but what am I going to do, bleed out? I got in the car and the driver said "I was about to switch off because it's been completely dead all night."
It was immediately obvious to me that Uber would go "oh, you need to go to the hospital, you'll pay more", preying on the need.
> It was immediately obvious to me that Uber would go "oh, you need to go to the hospital, you'll pay more", preying on the need.
That's certainly possible, but does not seem immediately obvious at all. Market prices move upward due to both increases in demand and decreases in supply.
It's entirely possible, especially given the driver's comments, that many Uber drivers who would otherwise be active already had switched off -- in other words, supply had already shrunk in response to low demand -- so you may simply have been facing low availability of drivers at that moment.
>It was immediately obvious to me that Uber would go "oh, you need to go to the hospital, you'll pay more", preying on the need.
I just tried this and can't replicate. While it's possible that uber was preying on the fact you had an emergency, it's equally likely it was a coincidence. Moreover, "this guy is going to a hospital so let's charge him more because he's probably going to bleed out" is a pretty poor strategy. Besides the obvious PR risk, most people going to the hospital probably aren't bleeding out or in any sort of emergency. Think of the last time you were at a hospital. How many cars are in the parking lot vs waiting in the emergency room? It's far more likely that you're there for non-emergency reasons (eg. visiting a someone, going to an appointment, or work there), and charging 3x surge pricing is a good way of losing the fare to a competitor.
“I can’t replicate” does not disprove the behavior. Reddit blocks me from loading almost any post while logged out[0], faking that they’re NSFW. The person next to me does not have this “feature.”
I believe companies use feature flagging in this way (for years!) to avoid scrutiny of these dark patterns. You, of course, may also be right that it was coincidence.
I wonder where the interlocking corporate directorships plays in the pricing market place. I assume the original assessment that these interlocks are to coordinate price fixing for entire markets through out the world is correct. Obviously, computers, AI and Machine Learning makes this more efficient and easier to hide.
I think these people that come up with these schemes should be hung.
pull up to a fuel pump, price boxes above the individual fuel hoses say “To learn pricing, for your convenience, please scan your phone’s NFC chip so we can determine your personal income and economy-wide purchase history.”
“Oh, it looks like you’re in the mor17-36-97wcmyoal-93 pricing group!”
“However, our scan indicates there are 2 other individuals in your automobile. To ensure an accurate pricing model, for your convenience please scan person1 and person2 mobile NFC chips.”
“Oh, we see passenger number 3 is in raf79-93-18hswcpfu—32 pricing. Thank you!
“Unfortunately, we’re
unable to determine passenger 2’s income and economy-wide purchase history due to their lack of NFC ID. For your convenience please see teller inside for pricing options.”
“If you question the validity of our estimations, please send a certified postal letter to our headquarters with the price ids previously shown on screen during the passenger scans. (The postal mailing address can be conveniently received by request from welovecustomers@fuelUSA.com Please allow 6-8 weeks for processing and we’ll get that postal address to you in a timely manner.)
just let me fuel my car… please…
onto the grocery store we go… “Please open our convenient app and scan the item for pricing.” … “This app requires the permissions…”
and just for the record, since some or our tech monarchs fail to tell the difference, this is dystopian, bad. not good. this is not a “neat future.” even if we throw some neon music on top, it’s still horrifying.
You should tone the paranoia down a notch. Realistically speaking if they can't identify you they'll just give you a worse price. It makes absolutely no sense to refuse a sale.
>Not if there is a monopoly on service and you can't afford.
Where do you live that gas stations operate as an monopoly? Gas stations are heavily competitive and operate on razor thin margins.
>The gas and electric company already know who you are. I wouldn't put it past them to start doing this.
Those are heavily regulated utilities. In most jurisdictions they don't even have the power to set their own prices, and they can't even cut you off for non-payment without going through months of warnings. They're certainly not going to refuse service because you can't scan an NFC card or whatever.
They are heavily regulated now, but it's inconceivable that these industries become more unregulated, it's not hard to make an argument that companies should be able set there own prices.
The way you propose the alternative has to also be satirical, being punished for preserving a right to privacy with a higher price, is incredible dystopian.
He basically described every rewards program ever. Before modern computers and data science that was the way businesses could get an idea of who wanted to buy what, and they give discounts if you sign up.
Potentially a scourge, but there is one area where such a pricing scheme makes sense: fines. Charging wealthy people the same as a poor person for a traffic violation, for example, is arguable justice. The fine is not a deterrent for the wealthy, and it is potentially life-changing for the poor person, as if they don't pay they will get a warrant and jail time. The legislators who set fine levels have some image of "average person" in mind when they do so; this simple approach is quickly invalidated when wealth distribution changes from normal to power-law.
Lina Khan's FTC continues to look where attention is warranted. I'm not sure there's anything necessarily bad going on here, or presumably there's some bad/some good, but it's definitely something that regulators should be paying close attention to. Tech + data enables totally new and very opaque pricing schemes.
Outlaw it so you don't regulatory resources. This is about companies dynamically setting (increasing) prices based on the demographics of the user. This is anti-market activity.
You don't think e.g. a barber shop should be allowed to offer discounted haircuts to homeless folks? Weird case but a real one, and is why "just outlaw it" is not often a good solution.
You are way off base. The issue is with hiding information. It's fine if the white iPerson knows a black man with an android is getting a different price. I think the philosophy you are falling back on is that you offer something for a price, person pays price if they find value.
Turning the market against the consumer using a machine is outright dystopia.
The theoretical market that we are all striving for is one where all actors have as much information as possible. Profit garnered from information assymetry is waste, waste creates problems and ultimately slows economic growth.
Or we can just keep playing: "I got mine, fuck you."
Is it really OK now that I know there's a difference in price? What can I do about it? Nothing, really.
> all actors have as much information as possible.
That has about as much relevance as a Turing machine to an actual computer. I don't have the necessary power to process all that information and determine my ideal choice.
If you know Company A is investing profits heavily into obfuscating markets, price discrimination, and building up "all that information" in its pricing strategy past the point of it being legible to you, while Company B is investing profits into homeless shelters and schools in your community, it allows you to make a more informed purchase as a consumer.
Voting happens at the checkout counter more so than the ballot box.
You don't even need to process all of the information. Computer programs can help, AI agents even. Even just the threat of an unusually dedicated pricing wonk combing through a mountain of complicated toxic pricing strategy to blog about it can make a company think twice.
Company B is probably worse and covering it up with philanthropy.
Purchasing power has greatly decreased as the cost of living and basic necessities has skyrocketed. Even with sufficient income, medical bills or dependents quickly erase all that surplus. There's often only only fiscally prudent candidate, politically or commercially.
What computer programs or AI agents can help? Are you referring to programs such as GnuCash, or are there consumer-friendly AIs nowadays?
I don't think you realize how thoroughly infested our culture has become with toxic pricing schemes. You could have all the cash in the world and without a credit score and a credit card half the market would be off-limits.
One example that's been weighing heavily on me is how I've been forced to return to Android. I used to try LineageOS on older phones but would lose the ability to make contactless payments, purchase train tickets, launch train/metro and even grocery store apps all thanks to SafetyNet attestation. Ironically my banking app couldn't care less.
This seems to make sense in your head but I fail to see this argument. Increase/decrease seems to be something you’re deciding on in your head.
Marketed price for billionaires: $1000
Middle America discount price: $20
Price for you: $100 because you’re not a billionaire but richer than middle America.
At its core, it is price fixing, and already technically illegal.
There is no sound argument that can be made that weights in AI software programed in don't have biases created by human's, and won't ever engage in illegal activity. They are just trying to make the argument, its not illegal because an AI does it.
We have already seen how Amazon uses their bait and switch algorithms (dynamic pricing) and there is more to learn about with regards to Project Nessy.
It is anti-consumer activity, which can only occur in concentrated business sectors (oligopoly/monopoly).
Price fixing has several types but is more normally called horizontal price-fixing, this is where a group of vendors collusively and collectively agree to a price schedule or range (indirectly or directly); to set minimum or maximum prices (indirectly or directly); to advertise prices cooperatively or to restrict price advertising. It is a violation of the Sherman Antitrust act.
There is a real estate company who used such software that is currently going through the courts for doing exactly this through their rental price algorithm in their software suite, to unjustly raise rents. They are now being taken to task in court.
The most optimal path to profits is through collusive market manipulation. It doesn't matter if an AI algorithm does this or a person, because there is always a person that was the agent that directed the training for the algorithm towards a specific outcome at the beginning, and they had a care of due dilligence testing that should have been done prior, to ensure outcomes remained within the bounds of law.
By choosing to use an algorithm to determine prices in your business that others use, you are actively engaging in price fixing because you are cooperatively advertising prices (based on the algorithm). This occurs in parallel as well where dynamic pricing (Amazon) actively engages in anti-consumer behavior known commonly as a bait and switch.
You came to buy something, but now you have to pay more because the price went up after they saw you walk in (or any number of other bots with regards to website traffic, a bot does not equal a person). You had cost getting there, and you need a product but the market didn't dictate that increase in price. The algorithm did, which may be based on flawed manipulatable inputs.
There of course will always be deceitful language and messaging around this because the people in charge of integrating these system's know this is illegal, but that won't stop them from testing it in the courts (as they've done time and time again), which is why fines don't work. Costs are passed on, and they will always profit more than they lose out in these areas.
AI has offered another dubious layer of indirection for all the things that have already been shown to be unlawful, people claim its not this outcome if an AI does it (which is almost certainly false in most cases).
You can program an AI to do anything, including evil, unethical, and illegal acts.
I think OP means "price gouging" rather than fixing. Or, if you're a libertarian and want a positive spin, "increasing prices to exactly what the market will bear".
No I said exactly what I mean, when you cooperate on prices you engage in price fixing, it doesn't matter if you direct an AI to do it for you, or not; what matters is you chose to cooperate on your pricing.
The FTC has literature posted on this exact subject.
Also that spin you put forth as libertarian isn't correct and misleads.
It takes economic verbiage in isolation, and overgeneralizes to falsity.
It neglects price inflexibility, and a number of other dynamics, instead assuming the market is static and that you can raise the prices to whatever the market will bear (which also neglects price fixing and other illegal activities such as bait and switching).
Value is subjective, and changes with each valuation done by an individual.
Some form of this (without AI) has been practiced in the past. How does one get around this?
Remote hosted disposable web browser instance and add items to non logged in cart then login once you see the prices so the offline cart is merged to your account?
No because the pricing is based on the perception of actual person/distinct (lived) personality. It's hard to capture these things in a purely headless way. You need to feed realistic sensor(wifi/bt/mic) data + location data (gps + wifi) to get accurate ads.
Without doing anything illegal and without broadcasting your intent on trying to espouse something criminal maybe pretend to have an affair (and encourage others to pretend to do the same or similar).
Separate communication apps on disposable visa, different google playstore account, different phone number, etc#. Trust that wifi+bluetooth+cellular proximity will link the phones together.
After a few weeks-months that second phone should be the similar enough to their actual profile for you to setup a remote residential proxy (w/ effective split tunnelling setup) for other people to funnel unique but similar requests through.
I saw a post on the eBay subreddit from a seller regarding shipping. They looked at the price to ship the item through eBay, popped off to a third party shipper to price compare- when they came back to eBay it quoted a new lower price.
This is excellent; surveillance pricing means the death of a competitive free market.
Imagine if your airline knew precisely how badly you needed to be at your destination and knew your $ net worth. Flying to your father’s funeral? That’ll be 20k. Flying for cancer treatment? 30k.
While I agree with you completely that this is absolutely undesirable, I don't see the relation to competition. Competition between airline carriers still exists no? Delta might charge 20k, and United might charge you 19k or whatever. Seems like competitive market to me. Shitty sure, but shitty and competitive are not mutually exclusive.
It's also a field where it's practically impossible for a new player to enter. It is just as likely that the airlines will form a cartel, and fix the prices. Then if you are lucky, some kind of regulation will be introduced or the government will crack down on it in some ways after 5-10 years, they will be fined for 10% of the profits, and a promise not to do that again.
Somewhat ironic that the GDPR pop-up lets me know that my information will be shared with up to 797 partners.
Are you the kind of person who reads articles against airline pricing? That means you're probably not a loyal customer and therefore we'll charge you extra.
It's about time the FTC took a closer look at surveillance pricing. The idea that companies could tailor prices based on personal data feels like something out of a dystopian novel. Does anyone else think this could lead to even more distrust in tech companies? Or is this a necessary step to keep up with the times? Either way, I'm curious to see how this plays out and what kind of regulations might come from it.
It's already a bit strange when I'm on a plane and know the person sitting next to me paid 1/2 what I did, and they're aggressively stealing the arm-rest.
It's different when the airline says "we know you were looking for a flight on this day and time because you checked twice before buying a ticket, so each time you checked, we increased the price, because we figured you were more likely to buy.
This example has nothing to do with the market, it's strictly targeting me as an individual.
I had an experience with Uber where I cut myself and had to get stitches, so put my destination as a local hospital. Instant 3x surge pricing, but what am I going to do, bleed out? I got in the car and the driver said "I was about to switch off because it's been completely dead all night." It was immediately obvious to me that Uber would go "oh, you need to go to the hospital, you'll pay more", preying on the need.