#Economics#Economy#PriceDiscrimination#DynamicPricing: "Ultimately, preventing the dystopia of perfect price discrimination—or some more realistic approximation of it—means cutting off companies’ access to the data they use to determine how much to charge us. This isn’t complicated; it’s just a politically heavy lift. Getting Americans fired up about their personal data has been notoriously difficult, which helps explain why we still have no federal digital-privacy law. Perhaps if more voters understood that strong privacy protections would also protect them from price discrimination, Congress would feel more pressure to get something done. (A glimmer of hope appeared earlier this month when lawmakers announced a bipartisan bill that would limit the user data that companies can collect.)
Near-term solutions might depend on the companies themselves. If prices become too complex, that creates an opening for a firm to commit itself to clear, simple pricing, Bentley University’s Shelle Santana says. For example, Southwest Airlines allows two free checked bags. Mark Cuban’s pharmaceutical wholesaler, Cost Plus Drugs, markets itself as a transparent alternative to the usual stress of buying medicine. Boring Mattress Co. promises to help customers “escape mattress hell” by offering a simple flat-rate mattress with free shipping. Santana cited JetBlue’s early marketing. “Their whole campaign was, We like our customers,” she said. “As a flier, you’re like, You don’t even have to love me. Just don’t make me feel like I’m in hell.” In a world of constantly shuffling prices, could predictability become a competitive advantage?" https://www.theatlantic.com/ideas/archive/2024/04/surge-pricing-fees-economy/678078/
#DynamicPricing#GigEconomy#Uber#Algorithms#ConsumerRights: "Dynamic pricing today may be unavoidable, but what consumers crave is a baseline of stability and clarity on how much we’re paying and why. There’s something unshakably disorienting about prices changing so quickly and finding our wallets beholden to a set of algorithms we’re not privy to. “It gives the feeling that we’re being manipulated a little bit more than we think we need to be,” says Zagor. Dynamic pricing, with the speed and detail with which it’s utilized today, allows businesses to optimize prices — for businesses, it can eliminate a lot of the uncertainty over whether they’re getting maximum profit. But that can come at the expense of more uncertainty for consumers. “We have this tension between ultimate efficiency for a business and consumer fairness,” says Witte.
#DynamicPricing#Algorithms: "“Dynamic” pricing, as many in industry call it, or “surge” pricing as is more widely known by consumers, whereby businesses flex prices at particular times in response to shifts in supply and demand, is not a new phenomenon. It has been used by airlines in the US, for instance, since 1983 when the US government relinquished the power to set domestic airfares.
When booking flights and hotel rooms, consumers have become accustomed to the rhythms of the dynamic pricing model: book early or during the shoulder season and get a good deal; book last-minute or during the busy holiday periods and get penalised.
However, powered by algorithms and artificial intelligence, it is being introduced at a rapid pace by a growing number of consumer industries. Amazon changes the price of its products on average every 10 minutes, using millions of real-time data points to benchmark against competitors and track demand surges.
“It will eventually be everywhere,” says Robert Cross, who created a computerised dynamic pricing model for Delta Air Lines in the early 1980s before doing the same for hotel giants Marriott, Hyatt and InterContinental Hotels Group.
As high inflation erodes margins and improvements in technology make dynamic pricing cheaper and more practical for businesses to implement, the temptation to deploy the pricing strategy is growing in industries that have so far remained largely untouched by the method. Bars, restaurants and bricks-and-mortar retailers have historically only adopted dynamic pricing for basic discount offers, but that could change."