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Privacy Incursions to Support Price Discrimination
An anonymous reader writes "BusinessWeek has an interesting interview with academic Andrew Odlyzko about how increased corporate spying will inevitably lead to targeted pricing and how this system can be abused." The paper (pdf) makes interesting reading. Very good insights into the reasons why businesses want to get to know you.
Is this legal in the United States? It sounds similar to price fixing to me.
The preceding comment has been reviewed and declared to be compliant with HIPPA Phase II regulations.
Slap privacy on something and you can generate controversy pretty easily, but soda machines charging more when the weather's hot is nothing new.
Couldn't this be turned around by making false online identies? Tailoring it to garner the best prices?
You stop by CNN.com, and a pop-up flashes on screen: "Hello, Mr Thompson, you look like you could use a bigger penis!"
get f*&ked. I don't want them targetting me and I definately don't want my privacy compromised for it. Advertising doesn't work on me. It usually just makes me not want to buy things.
-- Karma Karma Karma Karma, Karma Chameleon - Boy George
That Bill Gates will get charged $1000 for a pack of gum?
If so, I'm all for it.
I suspect that this field will become increasingly important in the years ahead. One problem (from the supplier side) in the current economy is the lack of pricing power available to boost earnings. Partly due to influences like the availability of product information on the web, consumers are more willing and able to find the best deal on a given item, rather than just march down to the store and pay MSRP.
People also have to realize that price descrimination is and has been all around us for a very long time. Coupons, "daily specials", business-class travel, etc. are all examples of this. There should be plenty of opportunities to increase price descrimination without impacting customer privacy (i.e. the temperature-sensitive drink machine in the article).
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Legality is dependant on how much you are able to spend.
For instance, a tow truck or taxi driver may charge a well-to-do suburban driver who breaks down in the inner city several times the going rate, just to get their rich butt to safety.
And imagine the poor diabetic about to go into insulin shock at the pharmacy, why, they'd pay treble to stave off a medical emergency.
Now, a nice sense of business ethics, based on such hokey premises such as "Thou Shalt Not Steal" might mitigate this, but I have trouble imagining it in our liberalist society.
A. Rightmann
Uhm this is about soda machines charging different amount of money from the different people at the same time.
stupid politcally correct bullshit
"So, I'd like to buy a lamp. I'll pay a dirham for it."
"Bah, this lamp is made of the finest brass, five dirhams is the least I can accept!"
"Eh... out of pity, I might be persuaded to go as high as two dirhams."
"Sir, I can see you are a man of discriminating taste. As a special favor, I will let it go for three dirhams."
"Done, provided the lamp is filled with oil."
"You drive a hard bargain sir. Done."
All the creatures will die, And all the things will be broken. That's the law of samurai. (Jubai, 1605)
Sharper Tools for Discriminatory Pricing
Expert Andrew Odlyzko explains how tech advances are making it much easier to charge one price for you and another for your neighbor
Why do corporations want your personal data? The simple answer, according to Andrew Odlyzko, the director of the University of Minnesota's Digital Technology Center, is that such information is the key to a holy grail of capitalism: discriminatory pricing.
Economic theory posits that price discrimination -- where companies charge individuals based on their ability to pay and their value as a customer -- is desirable since it makes trade more efficient. Yet it rankles consumers, who perceive differential pricing as unfair. The fact that business travelers, whose corporations can arguably afford it, pay more for airline seats than a vacationer has made air travel more popular and routine. At the same time, the price discrimination that charges two people different prices for the same class of service infuriates those who pay more.
In a paper to be presented at the Fifth Annual Conference on E-Commerce this fall, Odlyzko, a Bell Labs researcher for 26 years, doesn't argue for or against discriminatory pricing. He focuses on how technology can bring it to new levels of sophistication and prevalence.
In 2000, Coca-Cola (COK ) tested a vending machine that would raise prices on a hot, humid day and lower them when temperatures fell. Today, Amazon.com (AMZ ) knows what, when, and how often customers buy and is experimenting with offering personalized bundles -- buy two books and get a discount, for example -- to induce people to buy more. Twenty years ago, neither experiment would have been possible.
Managers who invest in privacy-eroding data-collection technology aren't always conscious that they're moving toward a world of widespread discriminatory pricing, Odlyzko says. Rather, they're trying out ways to use information to increase profits. But as corporations become more sophisticated in collecting and parsing consumers' personal information, success will lead them to more pervasive price discrimination. On July 28, I talked to Odlyzko about how data is being used to usher in a more efficient -- and privacy-invasive -- economy. Edited excerpts follow:
Q: Your paper posits that private companies now have both greater incentive and ability to discriminate on pricing by collecting and analyzing customer data. How so?
A: The greater incentive comes from the fact that in an information economy, an increasing fraction of the costs is fixed. It costs a large amount to create and market a movie, but very little to distribute it to a theater and on-demand to a customer at home. But different customers are willing to pay different amounts for the privilege of seeing a movie.
In the last issue of BusinessWeek, there was a letter from a reader who advocated that Hollywood should start by charging $30 to see a new release at home, then reduce the price to $5 over time. He said he would happily pay $30 to see a new movie at home because it costs him $75 to see a movie in the cinema -- after he pays for the babysitter and popcorn and tickets.
So here's one guy who says he's willing to pay $30 because that's much less than what he's currently paying to see a new release. On the other hand, you've got teenagers and adults who like the social atmosphere of a movie theater, the wide screen, etc. For them, you have to induce them to stay in and watch the movie, rather than going out, by offering them very low prices, maybe $3. If you can do both without getting them upset, then society wins.
Q: So why does differential pricing upset customers?
A: There's this central issue of fairness that comes up. People are very concerned that they'll pay more than someone else and be played for a fool.
That's what we dislike about having to deal with the salesman in the car-buying process. That's why people got angry enough to file lawsuits when they observed that catalog companies had been offeri
The easy solution to this though is to simply not let the companies gather any information about you. For example, if you are a businessman, they will try to charge you more for airfare. Whereas, if they no nothing about you, they will assume that you are just a vacationer, and you can get a cheaper fare. It's all about working the system.
Now don't you go getting any ideas...
Actually, my last job was as a pricing analyst, and it was all about this topic. How to price differentiate while staying within the bounds of the law. Arguably this increases overall economic efficiency.
Felt kind of weird, however, trying to figure out how to wring every possible penny out of the small buyers but coming back, while at the same time keeping the national accounts in check with huge price reductions (50% or more). The 3rd factor is making sure that the little guys never knew about the big boy pricing, or at least never knew more than the fact that buying more could be a positive thing for their own price structure.
Keeping small guy prices high is easy.
Keeping big guy prices low is easy.
Keeping the both happy customers is not.
I see some major potential for abuse with this. What if a compant decides it does not want to sell to people of certain ethnic backgrounds (French and Arabs, for instance), and raises its prices for those people to a million dollars?
"Do I dare disturb the universe?"
So does this mean that all those people claiming that the software they steal isn't a loss because they wouldn't buy it anyway will get to buy it for $0.01? I mean, that's accurately priced for them...
Sig & Below
Yuck Fou
This is very similar to the targeted prices of DVDs (region-coding). It's definitly a good thing for corporations (making people with more money pay more while still having access to lower-income markets), but there are obvious implications...
Of course, barring poor legislation, there are always ways around this sort of thing. If $product is available somewhere for less, I will be able to find it somehow (thank you Internet!) regardless of a corporation's efforts to trick me into paying more.
Right now, I have a region-free DVD player (flashed APEX), a region-free PS1 (stealth chipped), etc...
Geeks always win.
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Ever been asked to provide some "promotional code" from an ad before getting a price? Different ads have different pricing. Giving loyal customers better prices is common. Airline pricing seems fair to me. A business that makes me travel on short notice pays through the nose. Joe blow who plans his vacation well in advance gets a better price. Buyers beware same as always. Well informed consumers get better deals. That won't change. The people who don't like this want everyone to pay the same shitty prices. They want to remove all responsibly for getting the best price from the actual consumer.
Sounds like they just want to sell my demographic info.
Targetted pricing allows people who could normally not afford it access to products they couldn't normally buy. And it despite what it seems, it doesn't raise the price for others - they would be having to pay this price anyway but now others also have access. It may even increase the value of the product they buy because if more other people are using it, in some cases, compatibility issues stop hindering its usefulness.
Instead I will start getting weight gaining tips and candy advertisements
New year Resolution: Don't change sig this year
You said they are "obviously" modified.
Wouldn't be possible to make a proprietary code which use a selective set of files from a GPL package without modifying it? resulting in a binary which isn't recognized as the original.
It's actually possible and I don't see how this could be a violation of the GPL and I wouldn't see how an outsider can tell right from wrong, I would find it quite arrogant from his part.
It even sounds a bit diffamatory.
*Everyone* I've ever asked (quite a few) feels that advertising "doesn't work" on him/her. Let's face the reality, though: advertising works. It works in general, and it some cases, I feel confident that it has worked on you. I'm sure there are examples you can think of when you DIDN'T buy something b/c you hated the advertising, but there are bound to be some products that you've only bought because at some level, the advertising worked (even if it's because other people were manipulated by ads so that brand is the only one in the store now).
Know thyself.
Victoria's Secret got in trouble in my state for doing this. They sent out catalogs to the wealthy areas of town, which contained higher prices than the catalogs they sent out to the monitarily challenged sections of town.
It caused a big whinge fest a few years ago.
This is similar to web sites that compare offering prices, say for hardware. As long as we have the tools to know what prices people are selling at, I don't have a problem in them knowing what prices we're buying at.
And as many people have said, this is the same function that bargaining fulfills.
Odlyzko is a premere researcher in compution the zeros of the Zeta function. Here is his site.
It seems that companies claiming prices as 'confidential' want it all their own way. That doesn't seems like a very pure form of capitalism.
We already know corporate spying is rather widespread. And what do they look for? Well anything really, but client lists, contracts, bids, past sales, etc are prime targets. Of course this will be used for targeted pricing. It already is.
The thing that makes me wonder though, when they say "targeted pricing", do they mean blatantly open about giving me price A and John Doe gets it for price B? It's done behind the scenes already. Sure there'll be a "suggested price" price most companies go "oh, you're from Chili's, so you get this price" and such. Hell, the rental car industry has such a slew of different prices, based on if you're renting it for pleasure, if it's a corporate rental, if your car is in the shop, if it's an insurance rental, and so on. I dunno...this just seems like a no-brainer to me and doesn't surprise me at all.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
You are exactly right. The consumer still has control of the decision to purchase- but the transaction is now more personal.
I can remember shopping in the Philippines- each clerk had a calculator in hand to show you the price of an item- so that other customers would not over hear. Each transaction stood on its own and you might do better or worse than the person standing next to you.
It's hard to believe that's how Micronians are made. Why don't we see it right now by having you both kiss one another?
Until an unplanned meeting with some black ice and a nearby tree, I used to own a Jaguar XJR. Now, big luxury cars depreciate fast and this Jaguar was seven years' old at the time of its demise. In other words, most people's year-old hatchbacks cost more than this car's second-hand value.
Despite that, the majority of people I dealt with who saw the car decided that I was obviously stinking rich, available to be fleeced and took the opportunity to try and rip me off. This would include car mechanics to a small extent (it was main-dealer serviced most of the time, you get ripped off there anyway) but also to workman calling at the house. Prices quoted for the same job varied enormously depending on whether I left the Jaguar parked outside the front or whether we left the MX-5 (Eunos Roadster/Miata by another name) parked outside.
Price discrimination? Yep, know all about that.
Cheers,
Ian
Slashdot already have differential pricing. You can get it for free if your willing to look at advertisement.
However if that's annoying you, you pay and get rid of the advertisement!
It pisses me off every time I'm in a store, but I only get really angry when the checker says something like 'Sir, you would have saved $15 on this purchase if you had used your discount card. Would you like me to give you one now that I'll use for this purchase.' If I have to pay outrageous fines to maintain my privacy, I'd rather not know how outrageous they are.
Recently (probably as complaints have risen from my demographic), most of upscale markets in our area have started granting the discount anyway if you tell them that you value your privacy, and they swipe a register card instead. Presumably they now are collecting data on privacy freaks, but at least it is as a group rather than as individuals.
--
BitTorrent in C -- LibBT
http://www.sf.net/projects/libbt
and figured you were a masochist who enjoyed paying large sums of money for unreliable objects.
A. Rightmann
Think about it this way: two buyers, based on their collected information, are offered DVDs at wildly differing prices. Say buyer one gets said DVD for $1, but buyer two gets it for $10. Both are satisfied, buyer one because it feels really cheap and buyer two because he loves the movie.
Assuming the buyers never converse about the price they paid, both will be satisfied with the exchange value of the DVD, despite buyer two's costs being 10 times his compatriot's.
Ironically, if the two buyers did share price information, buyer two would immediately become irate, knowing that he could have had a better deal. Then again, it's possible that he might just shrug and say, "it was still worth it." I think it just puts the onus on the shopper to be as informed as possible about the value of their purchase and on the seller to make sure their discriminatory pricing doesn't leak out.
I couldn't find a link to it (old story), but the class ring company Josten's had different pricing scales for inner city and suburban school in the Minneapolis-St. Paul metropolitan area a few years back. The shit hit the fan when the media caught wind. Ironically, I don't know that they ever changed their pricing scheme.
Under capitalism man exploits man. Under communism it's the other way around.
" Slap privacy on something and you can generate controversy pretty easily, but soda machines charging more when the weather's hot is nothing new."
.50 because it didn't, can you see how the sale of Guichi belts will drop off.
But, if you walk up to the machine and the numbers flip and charges you $20 for a coke because it detected the Guichi belt from the electronic ID chip in it, and the next person in line gets charged
There is a business model in consumables that is one price to everyone for this product. In barter societies this is different. I personally like the one price thing. The suggestion here is not barter but more like a silent auction behind the scenes to determain what the maximumn price they can get from you is.
The insurance company model is probably closer to this but for commodities from the same company I think it is just too greedy and sneaky.
Do you really think ANY company, ESPECIALLY the airlines, would make such an assumption? More likely, they'd default to the highest rate possible until you cave and give them the demo data they seek...
Come on people! Mr. Garrison devised a superior alternative to air travel but got shot down by the airlines anyway! These people are bloodthirsty and ruthless.</hyperbole>
GTRacer
- Not sure if IT would be worth the pain in the ass...
Defending IP by destroying access to it? That makes sense, RIAA/MPAA. Go to the corner until you can play nice!
It may sound awful mean, but remember that the possibility of changing very high prices on occasion may be the only thing that makes the good available in the first place. The diabetic will surely be sorry he's not getting his insulin cheap, but if the possibility of his getting taken advantage of and providing big money to the pharmacist is the only reason the pharmacy is there in the first place, and otherwise the diabetic would die, then he can't be very sorry.
In the case of the taxi driver, remember that prices can't get too high, because (in the absence of collusion) otherwise other taxis would step in, at a price approximating their actual cost, not the benefit to the consumer, under perfect competition.
There are some laws limiting price discrimination. The most widely discussed is the rule of maritime law that a salvage ship can only charge a reasonable price, even if it's the only one around and gets the sinking ship's owner to promise something higher. There is extensive economic analysis of such rules; the general conclusion is that they are not useful, subject to the usual long list of exceptions.
There's a broader question, though. Suppose price gauging is "immoral" according to our common sense but its existence in a particular case is Pareto efficient: that is, it makes everyone in the world better off. Utilitarians would say that, in such a case, we are obligated to discard our moral intuition to make everyone better off. Do you disagree?
I Can't Believe It's A Law Firm, LLP does not necessarily endorse the contents of this message.
This has indeed already been put into place in many markets. Check out this article for one example of such.
I ain't evil, I'm just good looking.
I recall buying my last car, where the salesman had to try several tactics in succession before realizing I wasn't the typical dumbass.
The tactics he tried were set up to catch people of decreasing stupidity, but, because he didn't know who I was, he had no choice but to make guesses about my intelligence and willingness to spend money. This means I was slightly empowered as a consumer, and the deck wasn't entirely stacked in the dealer's favor.
Now, imagine if the salesman had access to my entire purchasing history. If you think salespeople are agressive now, I don't want to imagine what it will be like if they use our own experience against us! The credit score is already bad enough as it is.
Healthcare article at Kuro5hin
Differential pricing is when you charge two different people a different price for the exact same product.
Slashdot offer two product variants, one free with ads, one paid withous ads, both the same price to everyone. It's quite different.
Read reviews of shopping cart software
I'm sure that economists and capitalists will disagree with me, and perhaps I am naive, but what's wrong with selling your widgets at a fair market price to all customers?
I guess I see business as putting too much intellectual capital into market manipulation -- be it discriminatory pricing, intellectual property machinations, accounting manipulation -- and not putting enough intellectual capital into making better products that people want.
It seems that it's become perfectly legitimate -- if not *more* legitimate -- to sell inferior products through manipulative means than it is to simply sell a good product in a straightforward way.
Am I just overly naive?
The air travel example is one where the airlines don't have to know anything about the traveller. They use the travel dates for the round trip. If the trip crosses over a weekend, it's more likely to be a vacationer. If both flights are occuring within the same work week, it's more likely to be business travel.
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Avoiding tracking is easy pay cash.
As for the differential pricing, shouldn't be a problem. If you do not want to buy at the price offered then haggle for a different price. Ask for a discount and see what happens. A 'standard' price is the method of obtaining the highest price from the 'average' buyer. It also allows the accountants to calculate profits a little easier.
Read about negotiating, it will help when you are discussing pay and benefits for new employment, purchasing a car, etc.,....
I'd imagine it would more probably take the form taxi drivers in cities charging blacks more because of the added risk.
And you know what? I wouldn't have a problem with it. Frankly, black leaders need to get up off their asses and get to work on the problem of black crime. Blacks are as much more likely to commit crimes than whites as men are than women. The black crime rate has always been bad, yes, but it hasn't been this bad. If you look at the statistics, poverty doesn't begin to explain it. It's mainly the culture.
I'm pretty sure this happened ot me the last time I bought an airline ticket. The Guy next ot me was complaining about the 550 he paid for the ticket. i just slumped in my hcair and didn't mention that I paid $125. F.Y.I this has been going on for YEARS. The models that these data mining/spying techniques will just be more complex than "are they a business or pleasure trevaler?"
I tried for 5 years to come up with a clever sig...only to realize that I am not clever.
Who are you trying to kid? Republican's are the first to the trough when it comes to "Thou Shalt Not Steal".
Liberalism has nothing to do with it. Those with the money buy their way into influence. The rest of the sheeple are conned into buying into a "profit at any price" mentality.
Just listen to Microsoft apologists.
A Pirate and a Puritan look the same on a balance sheet.
Something similar already happens, but in terms of service rather than price.
Walk into a ritzy store or art gallery, and if you're young and not dressed like you're wealthy, if you get any service it'll be of the kind that is only intended to let you know that they're watching you.
One time some friends and I visited a gallery in Philadelphia that was showing the work of Mark Kostabi; prices in the $10,000 and up range. We were pretty well ignored until my one friend mentioned, loudly, that Daddy had a Kostabi (which was true, he was a VP at a pharmaceutical company).
And, of course, there's also the long established practice in some areas and establishments of giving slow service to the black or hispanic customers.
Kind of related, there's lately been news that Abercrombie and Fitch has a policy of offering jobs to the hot-looking white people who come in, regardless of whether they asked for one or are experienced.
Yes, I do think that companies would make that assumption. It happens today. If you go to orbitz.com (or any other airline site) and order plane tickets, you will find pretty much the cheapest fare. The reason is, is that they no nothing about you. If you call them up and tell them you are going on a business trip, and need to fly somewhere as soon as possible, then don't expect a cheap fare.
Here's the deal. In a perfect equilibrium you use price discrimination to sell to the market at a price you will actually purchase. Sure, Mr. I'm Filthy Rich might be willing to buy that plasma TV for $4000, but I'll balk at that price. I might be willing to spent only $2000. If the manufacturer could afford to sell at that price, and knew that this was all I could afford, they would sell to me at that price to get the sale. The only way this works though is if the left hand doesn't know what the right hand is doing.
:P
Somewhat the way e-bay works, but not exactly. The point is that if price discrimination worked perfectly, a manufacturer could tailor a sale to the customer that's targetted, and sell at a price that would get them the sale, irregardless.
Perfect world scenario anyway. Someone will get screwed under that story though.
Karma: Chameleon (mostly due to the fact that you come and go).
Well .. the "monitarily challenged" should have embraced this .. become shoppers for the wealthy, purchase the products for their lower price, add a profit margin, and resell to the wealthy. (at a cheaper price then the catalog).
Hell, they probably could have marked it up more by calling it a "personal shopping service" ..
RE: Cokes vending machine that changed price on temperature.
Pardon the spelling, but isn't Price gouging illegal? I remember after the Gulf War II started, several nearby gas stations threw the gas prices up 20-30 cents more per gallon. Then there were threats of fining and such.
Difference in soda and gas...but the theory is the same.
I do see the problem that might occur here, and you do bring up a very valid point, but this relative payment size is not a bad thing. In a world where the rich are filthy rich and the poor are dirt poor (and I truly believe the gap between the rich and poor is increasing), it doesn't neccessarily seem like a bad thing for targeted pricing to workout, so long as it's not an egregious attack on the value of their services.
It's sort of like a builtin tax system. Taxing is relative to the amount you make, and it seems to work pretty well. If you break down and need a tow truck service, they might come and give you coffee while they pick you up, and charge you a bit more. It's for a reason: you can afford to pay more.
But now, don't go crying, "well damn, the rich kids aren't going to be able to get things anymore!!" You're missing a fundamental point of capitalism if you do: COMPETITION. If, and only if, one company has monpolistic control over a market then they can control pricing. And if they do, they'll get in trouble. If they don't have monopolistic control, the safe guards of free economy will come in and ensure prices aren't inflated.
I'm just a diehard liberal, and I want the rich taxed off their thrones, and targeted pricing is something that doesn't seem infinitely evil to me. At the same time, I do realize that free economy will keep rich people from becoming less rich.
Utilitarians would also argue along those lines for a massive reduction in trade barriers, and in large part they'd be right (IMHO). The decision on such matters, however, does extend beyond dollars and cents. There are other factors (social stability, national security, cultural tradition, etc.) that don't fit into the economic model yet play a role in setting policy.
/. has the sig along the lines of, "all models are wrong, some are useful." A very good thing to keep in mind...
I can't recall the user, but someone here at
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That's because you need to fly somewhere soon, not because you're in business. If you had to fly somewhere tomorrow for personal business, you'd be gouged the same way.
It is the ugly face of capitalism. Profiteering, the one who dies with the most money wins, whether or not it makes the lives of those without money miserable, is the cornerstone of our great and proud nation.
If you look at the statistics, poverty doesn't begin to explain it.
Okay, troll-baby...
At the risk of going very far OT, the statistics do demonstrate that socioeconomic class dictates crime rates.
Or to put it a way that most racists usually can grasp - Poor urban whites have the same crime stats as poor urban blacks. Middle-class suburban blacks have the same (far lower) crime stats as middle-class suburban whites.
Sorry to burst that particular bubble, but you ignore a simple and verifiably truth. Take an intoductory sociology course. It will do wonders for the accuracy of your world-view.
Clothing manufacturers will give away free clothing to hot-looking chicks and hunky guys.
Especially if they act "cool". That is, your models act in such a way that makes other people want to be like them and to wear the same clothing as they do.
Ugly, out-of-shape and uncool?
We'll be paying full price for our duds. Or else we'll be wearing clothing that is not "cool".
"Provided by the management for your protection."
Suppose price gauging is "immoral" according to our common sense but its existence in a particular case is Pareto efficient: that is, it makes everyone in the world better off. Utilitarians would say that, in such a case, we are obligated to discard our moral intuition to make everyone better off. Do you disagree?
No, of course not. I might go so far as to equate the pursuit of pareto efficiency with morality. But in a dichotomy between price discrimination and not, both choices are actually pareto efficient. No matter which choice you start with, you can't switch to the other without making someone worse off. If a merchant is price discriminating and you force him to stop, his revenue drops. If he's charging a flat fee and you order him to start discriminating, the rich guys get jacked. So I guess I don't see how pareto efficiency is relevant.
Think of it as two siblings fighting over a toy. No matter who has it, it can't change hands without one of the siblings losing his toy. Therefore, either sibling having the toy is pareto efficient.
What about getting highspeed internet for a business as opposed to a private residence? I know for a fact the exact same speeds for one place might cost $45CDN but at a business the exact same service costs about $100 or $150CDN a month. There's price descrimination for yah.
I see a lot of talk about businesses collecting personal data, and how it will help them and possibly me. I want to know when this will happen. To give just one example, my family uses the "Frequent Buyer" card at the local supermarket. They have a complete list of every food item my family has ever bought. They know who we are and where we live. When am I going to see targeted advertisements and targeted coupons based on my historic purchases? Right now, I get the same junk mail from the supermarket that all of neighbors get. No customization. Right now, I'll believe when I see it.
OK, I don't know why you're equating liberalism with amorality, but you are seriously mistaken if you think that the idea of "Thou Shalt Not Steal" first appeared in christian texts. You don't have to be a right-wing christian conservative to believe that stealing from people is a bad thing.
The meme being propagated that one cannot have morality without religion is BULLSHIT. And the sooner you realize that, the sooner you'll have my ear on what you think should/shouldn't be done in our (I'm assuming you're American because I don't here crap like this from foreigners) society.
Don't let the lusers get you down.
Because there are a lot of near-elderly in Congress, and no teenagers. That's at least why teenagers pay higher rates than elderly, though I am pretty sure elderly pay higher than, say, a 45 year old.
-Looking for a job as a materials chemist or multivariat
"banal"
You are so right.
Mr. Odlyzco states that: "Economically, price discrimination is regarded as desirable."
Hoo boy, Where did that come from? Not only is that statement wrong, it is so fundamentally wrong I can't believe that anyone would interview this guy (obviously they haven't published his paper).
All beneficial aspects of market economics is based upon a "market clearing price." The "efficient market" is based upon a market like the New York stock exchange. The market clearing price is what drives down prices, and gives us what is called the "consumer surplus."
Price discrimination only results in higher output for a monopolist--because the monopolist makes his profit from restricting supply. The highest output is always achieved from a perfect market in which the price is driven down to the marginal cost per unit.
Only a monopolist can engage in true price discrimination, but all vendors wish to create "limited" monopolies and get price discrimination to certain degrees. Limited monopolies can be created through brand IDs, location, government franchise, patent and copywrite, being first to market, and so forth.
Price discrimination in airline fares is a complex intertwining of federal governement regulation, local airport regulation, kickbacks (where the flyer is not paying the fare), obfuscation and fraud.
If price discrimination were the rule, we would pay more for water than we do for wine. Every life-saving or limb saving medical operation would require the patient to file bankruptcy and pay every penny to the hospital because bankruptcy would always be preferable to losing an arm.
No prices would ever be posted anywhere. We would negotiate the price of every single purchase--including every hamburger and every Coke (his example).
It is this bleak vision that lead to over half of the world choosing communism in the first half of the century. It is the open market, that gives us our prosperity.
The issues of price discimination, monopolies and limited monopolies are so well documented that it is puzzling that Business Week would even think it worth while to interview this guy. In any case, it is pretty clear that after taking Econ 101, Mt. Odlyzco dropped out halfway through econ 102
Did anyone stop to think about the good implications of targeted pricing?
Right now, the warez and mp3 and all of those things exist because college students and others do not have the funds to buy all of the media and copyrighted material they want access to. There is a glut of material on the market, all priced exactly the same.
Targeted pricing would allow media companies, pharmeceutical companies, and anyone else to sell to someone at the appropriate amount for their economic group, background, and other things factored into this.
theoretically, in an abuse free system, targeted pricing could be the answer to many of the current social problems in a market where everything is set at the same price.
Right now, development of drugs is funded by the pockets of rich nations. IP laws keep small and poor nations from producing these medications for their citizens. One shining example of this is aids medication. If a system were developed to encourage targeted pricing, then it could conceivably still fund R&D while providing people with what they need.
This also applies to getting what people want, with copyrighted media. Targeted pricing would allow for the college student and others to get legal access to media they want access to, and apply appropriate pricing to those with more economic power.
it really sounds ideal to me. however it has major problems.... privacy, and trusting those in charge. both of which are impossibilities.
conversely, we've already lost all of our privacy, and those in charge are corrupt anyway, so its not like we have anything to lose either way.
Find a similarly diehard Pepsi fan, and each buy the other's soda for them. So both pay less than the mean rate
Unless the store's TOS forbids this. The store may not be able to enforce this on things like soda, but for anything electronic and more personalized to the user, enforcement becomes feasible.
Also unless the store catches on. See, if you swap soda for long enough, the store will think both people buy Pepsi and Coke equally.
Unpaid ad: Coke sucks; drink RC instead.
Will I retire or break 10K?
They are greedier than other companies, and won't sell low-cost to the third world. So people die, it doesn't change the bottom line.
Big pharma is currently refusing to provide needed drugs in the third world because the demand is not enough (mostly for diseases that don't exist in the first world), but they still try to prevent the generic companies from supplying, because they (rightly) fear reverse engineering in places where they make money.
There are a number of drugs available only for animals (people don't get many parasitic infections in the first world) in the US that are not available for people in Africa for financial reasons.
Differential prices are fine, but there are limits. Government funded corporations (like big pharma) should be obliged to let others supply if they can't be bothered. I guess Microsoft can price however they like (even if it hurts them. If they succeed in killing windows O/S piracy their market will flee and kill their standards advantage. They are outsourcing too, I guess they want problems), but they are among the few who don't get lots of redirected US tax dollars (they have their own tax).
-SCO patented my sig, but I'm still using it.
You got me into this! You were the ideologue! I'm only a poor assassin! - Twenty evocations, Bruce Sterling
The credit score is already bad enough as it is.
Yes, it's not like how good you are at paying debts should factor into how much money someone lends you.
Credit scores are a good thing.
There are people I would lend money to and those I wouldn't. Similar to a bank, I tend to lend money to those who always pay on time as opposed to those who pay late, if at all.
I also tend to lend more money to someone who isn't already borrowing lots of money.
I also feel more comfortable lending money to someone who has a job, and a clear way to pay it back.
I like knowing that when I lend money, I get it back. People lend me money knowing they will get it back. This is how credit works.
If you're not worried about credit ratings, why do you have an insured savings account? why don't you lend your money to Enron?
But still, my point stands, the less you let them know about you, the better, because most of the time, they will have to assume that you are the lowest common denominator, otherwise, you will just use the competition's product.
The tourist McDonalds has no Value Menu; the regular one does. This is common practice, and it is up to the consumer to avoid rip-offs.
-----------
Together, we will drive the rats from the tundra.
Hotels do that. There's a hotel right down the street from one of Hewlett-Packard's plants. If you stay there and don't mention HP you'll get the normal rate. If you tell them you're on business with HP you'll get a rate that's 10% higher. And business airfare (before 9/11 anyway) was similar. Even if they're booked in advance. In the late 90's they got away with selling $300 tickets for $900.
And imagine the poor diabetic about to go into insulin shock at the pharmacy, why, they'd pay treble to stave off a medical emergency.
And pay, like, $1.50 for a Hershey's Bar?
Your sucker rating will haunt you like your credit rating. Now is the time to start being shrewd, before you build up a reputation a big fat sucker.
Price discrimination is sometimes not Pareto dominant over its absence, but it sometimes is: a ban on it might stop the merchant from investing in producing the good in the first place, leaving even the rich consumers, who would have happily paid a high price, worse off along with everyone else. Thus, permitting price discrimination is Pareto dominant over never permitting it.
In any case, stronger notions than Pareto efficiency (i.e., weaker senses of domination) would favor permitting price discrimination not always, but under very wide circumstances.
I Can't Believe It's A Law Firm, LLP does not necessarily endorse the contents of this message.
- collude by sharing their databases & personal info
- find a way to make it illegal for people to share with each other what they paid
- use DMCA-like tactics to kill reselling of their products. Sure it's all fair open market that they could charge consumer A $50 and consumer B $150, but they would certainly find a way to make it illegal for consumer A to turn around & sell the product to consumer B for $100.
Not to mention that the bartering systems have gone away (with somes exceptions) for good reason. People don't want to bother taking the time & effort to negotiate for most things--just give me a price & I'll either buy something or I won't.Vote Quimby.
>> The problem isn't when soda machines charge more on hot days (I don't even know why article metioned that, it's irrelevant). It's completely relevant. If you had just spent 6 hours in a desert and someone offered you a bottle of water for $10 would you buy it? Probably yes. If you had just spent 6 hours swimming and someone offered you a bottle of water for $10 would you buy it? Probably not. That is exactly the point of the article. Changing the price based on how much money they can squeeze out of the customer.
While being a bachelor here in Toronto I learned an important lesson in buying meat and how it is priced. Go to a rich neighborhood to buy your hamburger and go to a poor neighborhood to buy your expensive meats (steak, filet). What was interesting was that the quality of the lower cost meats was generally better.
When I got married, my wife didn't believe this until I did some comparison shopping with her. I suspect this is true in other cities as well.
myke
Mimetics Inc. Twitter
Well I'm neither poor nor rich, but I've been both broke and affluent. In my studies of the past I seem to recall a time (1814?, not sure on date or year actually) when income taxes were established by vote by the poor / stupid majority.
I say stupid because that SAME attitude, "the rich will pay more, the poor will pay less" was prevalent then too.
Well look around. Percentage wise, the poor pay MORE taxes than the rich who found tax shelters and ways to escape (including the ones GW Bush helped them with recently).
The question you have to ask is this. Will the rich NOT find ways to saddle the "poor" and less affluent with their higher prices while they find ways to acquisition items at cheaper prices than the "poor" ?? I bet they will just like they've outsmarted the mob/masses ever since humanity could trade things.
-Khye
I do believe that unauthorized credit checks are illegal.
Well the dealership doesn't need to see squat, and they shouldn't unless they are lending you money or doing the loan shopping for you. When I got my car loan only the bank providing the loan requested my report.
I believe they see a "full blown credit report". I would check at fool.com to get more information.
equifax.ca has a mail/fax in form to get a free report in Canada.
You can spew all you want about it being "net efficient" for everyone involved, and haul out the iota or three of vocabulary you learned in Microeconomics 101 to prove it, but....
Show me, the consumer, how price discrimination as it would be practiced by businesses (you know, entities looking to increase their profit, because that's what they do) actually has any net benefit for me. I don't really care how businesses save money, unless they pass the cost on (which they have no reason to do).
We're out of Mr. Smith's pin factory, people. Real world, real consumers. Give me a concrete example about how this would benefit me.
Now, if the coke machine made you enter in your last paystub, then compared that with a database of other people's paystubs, and then determined your price, that would be relevant.
There's already been at least one case in which it was found that a cab company had deliberately gotten telephone numbers in parts of the city which they did _not_ wish to serve. People living in these neighborhoods would, naturally, call the "closer" number. When that phone ringed, the company wouldn't answer.
With calling number ID, I bet this sort of thing is already rampant.
And, yes, the techniques described will make it worse and worse.
"How to Do Nothing," kids activities, back in print!
This is the title of a Knowledge@Wharton article from April 2002, still available from CNET News.com. I commented this article here. Basically, a professor of management argued that depending of your starting location on the Web, a *cheap* one or Forbes, you would obtain different prices from online travel companies. I tried it, sending identical queries *simultaneously* from different computers and browsers, but I didn't find any differences. Maybe things have changed.
Targetted pricing is a way for companies to supply goods at prices the market will bear.
This will allow them to charge the wealthy what they are willing to pay for a product (more) and charge everyone else what they can afford to pay for a product (less).
So, capitalism will, due to targetted pricing, become the self regulating thing that it should be and finally narrow the gap if not between the rich and the poor, at least between the haves and the have nots with more equal distribution of goods due to pricing pressures.
(seems kind of ridiculous, eh? This is the logical conclusion of what people are paniced about. The fact is that targetted pricing is a fad and will amount to nothing because markets work at a macro level and will force *all* prices to competetive levels)
Until an unplanned meeting with some black ice...
Well, that'll teach you to jack in to the 'Net and try and hack Sense/Net FROM YOUR CAR! Better to rent a back room at the Gentleman Loser.
(/super geek)
Freedom: "I won't!"
There are avenues for backlash if people get fed up with price discrimination.
If you've ever been to Southwest Airlines website, you can see what fares are available and what fares you could have paid. Because it is well known that Southwest sells these fares out on a first-come-first-served basis, people that end up with the higher fares know they have no one to blame but themselves (for not getting in earlier).
People therefore view Southwest as a discount airline. But here's what'll bake your noodle, Southwest gets more revenue per passenger/mile than premium airline United. People will pay more to be treated "fairly".
Ugly, out-of-shape and uncool?
:)) -- I swear, they work like a charm.
We'll be paying full price for our duds.
'We', huh? Speak for yourself. I am dead secksi.
Haven't you heard of "geek chic"? (Not Geek Chick; they are very rare and are an entirely different quantity).
As a serious tip, I will relate some advice my 5 years younger, much cooler, much more in-shape 10th-grade brother gave me, advice that changed my life:
"See, if you're going to be a skinny computer geek, you have to buy some of those black-rimmed Weezer glasses, and wear short-sleeved dress shirts with jeans. Oh, and wear cool shoes, either those hiking boot looking ones that rappers wear or lowtops like Vans or Curt Cobain shoes" -- I think he means Converse All-Stars -- "and MOST IMPORTANT, you've got to comb your hair forward and spike it like Brad Pitt did in Fight Club" -- actually some kind of 'bed head', not all spikes, with the hair swooping up in the front. He assured me that "girls are gonna be all over you, man. Girls LOVE Weezer glasses".
Now, normally, when someone gives me fashion advice -- especially about my hair -- I thank them sincerely, and do the exact opposite. I always have my hair cut short right when long hair starts coming back, and vice versa. But I swear to God --- the little bastard was right on. Girls love Weezer glasses. I have perfect, pristine vision, and I got a pair of fake glasses to wear when I go out to parties and things (I say that they are a weak prescription if anyone asks, or puts them on
I should really write an article for Slashdot, or something -- "My Cool Little Brother Answers Your Fashion Queries".
One other thing, for skinny guys like me: KEEP THE SIDES OF YOUR HAIR SHORT if you aren't planning on really, really growing your hair out. Otherwise, it makes your head look even wider, which makes your head look weirdly proportioned and oversized for your frame.
This should really be moderated to something like (+6, Listen To His Younger Brother Or You Will Continue To Look Like A Chess Club Member, Unless You Are At Uni In Which Case You Have Probably Already Got Geek Chic Going On, Along With Those Horrible 'Ironic' Retro T-Shirts From Goodwill That You Think Make You Look So Urbane.)
These systems are busy trying to figure out who's eager to blow big bucks (to charge him through the nose) and who's barely interested & very price sensitive (to charge their lowest price). Guess what - if you're willing to act poor when Big Bro's watching (and quietly pay cash after dickering price whenever you can for your luxuries), you can make this system work for you.
Much of the social status of being rich (vs. poor) comes from the blow-through-the-dough-and-don't-have-to-care (vs. sweating every penny) lifestyle & attitude. This system ain't much different from a bazaar 3000 years ago - the merchants knew perfectly well who was rich and who was poor.
It's easy to make up & spread cool- and credible-sounding stuff. Finding & checking hard facts is hard work.
Have you got any idea what insulin shock is? No? Didn't think so.
If you were going into insulin shock, you wouldn't be going to a pharmacy to get something for it. If you did so happen to be in a pharmacy at the time, then they would know to give you orange juice or box of sugar candy, not anything from behind the counter. Of course, this is all if you are conscious... if not, they would most likely call 911 to avoid being liable for giving you the wrong thing.
Of course, this is all in the US... it could be worse in a few war-torn third-world countries, but I don't think that is the point of this article.
Harold
...occurs in the prices employers pay to employees. Is it unfair not to know the salaries of all of your co-workers?
For individual price fixing to work, it has to appeal to the consumer on a number of possible levels:
- Product appeal
- Convenience
- Value (or apparent value). Why do you think all those do-dads on TV include "free" items? To build value into otherwise worthless junk.
- Impulse purchase
- Level of trust
- Time limited offers
Any experienced on-line purchaser or consumer usually has a rough idea how much certain items are worth, i.e. CDs, movies, etc. This is why I don't think price discrimination will feature large differences is price. It's easy enough just to call down to my favorite music store and ask how much a particular movie or CD is before I purchase on-line, or check other web sites. The point is, comparison shop. If you shop around, the most a price discriminator could get away with is a few dollars, not the amounts that some people have indicated here, but YOU HAVE TO SHOP AROUND. Whenever I am considering a large on-line purchase, I compare the price to what is offered at a local store.
The problem, of course, with shopping around is it entails effort and many want the web to be effortless, so they impulse buy or worse yet trust the deal that's offered to them without shopping. It's the same in the real world, you have to comparison shop.
What I think you will find instead of huge price fluctuations is package deals and specials tailored to the individual consumer. I see nothing wrong with that, actually it quite appeals to me. I regularly receive specials from an on-line electronics dealer that I frequent and have taken advantage of quite a few of these specials, after comparing prices first.
My 2 cents.
Taken to the nth degree, this scheme would be inverse-communism, instead of everyone being paid the same (and paid poorly), everyone gets a bad deal, gets taken advantage of , is treated poorly , because of their ability to pay more, so it flattens out the advantages of wealth to some extent, so:
.(compare Stalin et al, to big business etc)
Make more money your dollar buys less.
Whats not inverted is that there's someone at the top profitting by exploiting others.
It is kind of the same concept, but the difference is that it is at the *individual* consumer level. That goes beyond creative pricing. You can be sure that the pricing will be set to be as unfair as possible. That is how things operate, it is always done to the limit of the law. If they can get away with it, they will.
I have a friend who doesn't understand why targeted advertising is a bad thing. He says he doesn't care what information they know about him, and he woulnd't mind getting targeted ads. At that level, I agree with him, but you *know* that it won't stop there, and advertisers will push and push and push. To paraphrase Eddie Murphy in one of his acts:
They take things too far
Give an inch, they take a foot.
Give a foot, they take a yard.
Give a man a rope, he wants to be a cowboy.
If you allow them to get away with something, they will, and take a bit further to test the limits. Advertising is bad enough already, they don't need encouragement like this. If we allow them to do targeted advertising, we are asking for whatever happens next.
My beliefs do not require that you agree with them.
It may be inevitable that "none shall buy and sell except they have the mark of the beast", but that doesn't mean we should welcome it with open arms.
Fortunately, there are still merchants like Shoppers Food Warehouse and Trader Joe's in our area that don't require cards. In fact, SFW even advertises "No Card Required!".
20 January 2017: the End of an Error.
Why wouldn't you want the little guy to know that buying more would help them? Doesn't that mean more profit for you?
This sig is not the Zahir. Lucky for you.
I knew Andy at Caltech, where we were in the same class. I studied economics; he studied math. I was telling everybody the same stuff fifteen years ago and nobody listened.
Airline prices. The procedure seems to be to ensure that no airline passenger pays the same rate for a ticket as any other passenger.
All depends on who you are, and where and how you buy it.
Real utilitarians and economists, unlike the liberals' model of them, always recognize such factors, and there is no barrier whatsoever to including them in an economic analysis. If the population is really just outraged by the existence of something -- price discrimination, cocaine use, interracial dating -- then it will be economically efficient to prohibit it. But I have a rather hard time believing that the population really cares very much about these things, compared to the amount it cares about wealth, the distribution of wealth, health, children, etc.
I Can't Believe It's A Law Firm, LLP does not necessarily endorse the contents of this message.
Can ultra efficient price discrimination limit and eventually prevent entries into a market?
Imagine that Amazon.com succeeds in charging you exactly what you'll pay for. This means that you'll see their price, you'll consider it, and, WHAM, you'll click on the patented, novel, Buy(TM) button.
Now imagine that a new, energetic startup, Nile.com, decides that it wants to enter the internet book-selling market. It, not having the resources that Amazon has, is forced to use a "one-price-fits-all" strategy. Nile, by the laws of economics, will not be as efficient. And less efficient companies will lose out to more efficient ones, again, according to the laws of economics.
So all Amazon.com has to do to prevent Nile.com from gaining market share is operate at a high efficiency whenever there's a competitor. Once the competitors are toast it can go back to acting like a monopoly. The difference here is that NO ONE WILL EVER KNOW. If you don't know what price your neighbor paid, how can you claim that they've raised prices? Especially in a world where raising prices can actually mean not lowering consumer prices when distributor prices fall.
You're always happy with Amazon's price (remember this is a perfect price discrimination structure), so there's no incentive to look elsewhere. Amazon.com just keeps the excess profit from falling prices and only lowers them when new companies enter the field.
Bingo, a perpetual monopoly, one that can't be broken by anti-trust laws and investigations. Or am I seriously wrong in my theorizing?
www.eissq.com/BandP.html Ball and Plate System. Amuse your friends. Crush your enemies.
Census data from 1995
FBI Crime data from 1995
That's the US census data for 1995 and the FBI crime statistics. During that year, Blacks committed 54% of American murders. Note that Hispanics are counted as Whites in the FBI statistics when they commit crimes, but as minorities when they are victims.
You will notice from the census data that Whites (including Hispanics) comprise 68.5% of the nation's poor. They committed at most 46% of the nation's murders (neglecting non-Black and non-White murders).
You'll find some equally interesting statistics from the Department of Justice at:
Homicide by Race
Frankly, culture matters. Crime causes poverty as well as poverty causing crime -- throwing money at things won't help. A more profitable approach would attack the horrendous level of Black illegitamacy (68%), the glamour of crime in popular Black entertainment, and the widespread welfare dependance.
it was main-dealer serviced most of the time, you get ripped off there anyway
Please tell me this statement applies to luxury cars only. I don't have a luxury car, but I do prefer to bring my car to the dealer rather than "Joe's Garage." It costs more, but it's worth it.
TodayTM BillyJoelTM GoogleTMd for StitchTMes due to WindowsTM while RollerbladeTMing with an AppleTM and a PopsicleTM
If you make more or less money ALREADY impacts what you pay for the same good and services.
Some examples: If I were flat broke, my wife woul d and I would have paid NOTHING to deliver our child recently. Since I was actually employed (although not making very good money at the time), I got relativly shafted, emergancy C-Section and other expenses, ran to about 5k...
Depending on your income, you pay MORE for the same services provided by your government! Can you believe that!!! And the scary part is, a lot of those services you are paying for just hand money back to the folks who arn't funding it!
Being an ilegal immagrent in the US is the greatest thing ever, no taxes, free health care, and nobody gives you any crap...
That's why I buy everything at the local corner Quik Stop. I know I'm getting fucked, just like everyone else. :)
If you were me, you'd be good lookin'. - six string samurai
I mean, don't we already have things like 'discount' cards and that kind of thing?
autopr0n is like, down and stuff.
I wish it were as simple as this. Human nature usually follows a pattern wherein the desire to observe is followed closely by the desire to control.
In the first phase, the Bartender must sell both of us a beer at the same price, because he can't discriminate between us. In the second phase, the Bartender figures out (by looking at his data) that he can earn a dollor more profit by selling me a beer at my maximum price.
But in the third phase, the Bartender realizes that he can garner an extra 10 cents by offering me 2 cents of peanuts for free.
This raises the question of control. Am I drinking the beer because I want to, or am I drinking the beer because I'm being manipulated into drinking the beer so the Bartender gets more profit?
Clearly the amount of "free peanuts" I'm offered will be directly related to how "gullible" (or "controllable") I am, and anyone who choose his freedom over a discount will be labeled a "deviant"?
We'll leave it as an exercise for the Reader to spot other cases where the behavior of "gullible" people has been manipulated through offers of "gratis" or "reduced price" merchandise.
The thing about things we don't know is we often don't know we don't know them.
about three years ago. It was reported in the NY Times. They were charging for DVD's based on past spending habits. If you were known to be willing to pay a lot for a DVD you saw the higher prices.
There was a customer uproar and a threat of a class action suit. They publicly recanted and said "never again."
A public clearing house in which you report the prices you were offered, the aggregate data will allow the consumer to press the margin, just like the vendor is doing now. Information is our friend if access is unfettered, it is only when a single group controls access that the potential for abuse really becomes a great threat. A universal DB that tracked EVERYONE, would be fine by me if I had access just like the authorities. :)
If I could track Joe police officer's location, just like they could track me then so be it
errr....umm...*whooosh* *whoosh* Is this thing on ?
Obviously, (c) is the right answer. I'm not saying it's good or anything, just that this next step was inevitable.
And then that all leads up to the question "how do you sell the goods used?" I mean, I buy a my Altima for $20K. You buy it for $30K. The exact same car, same options, same dealer even. So now we both go to sell it in three years. What happens? Do I get to sell mine for $23K since you and others are selling your $30K car for $25K? Or do you go "son of a bitch, this sucks" as you realize you have to sell your $30K car for $15K because that's where mine is at? People already buy cars at different prices but if there was THAT big of a difference, it could make eBay (or any other used merchandise venue) a very interesting place to shop.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
If not, is it legal to have a lunch counter with only $100 lunches, but a 95% discount for whites? Or a University with $1,000,000 yearly tuition but a 90% discount for whites?
And if none of the above is legal, then I submit that other forms of Price Discrimination should be illegal too, be it gender, income class or anything else.
I'm an American. I love this country and the freedoms that we used to have.
They don't care *who* you are, just that "the guy who is using this particular card" buys whatever it is you buy. They're still getting records.
Simple fix-- trade cards with people. Find a friendly person in line and offer to swap cards. Swap with your friends. Swap with out-of-town relatives. Get three or four cards and use them intermittently, and then swap all of *them* out. Tell everybody you swap with to keep swapping. NOW their records are useless.
Or, you can take the lazy-man's route, like I do. Just claim to have forgotten your card EVERY TIME, and the nice cashier will usually swipe a "store card" through for you. Problem solved.
Well, depends on Joe's Garage, but generally I find the above to be true to all cars. Though a luxury car does cost a heck of a lot more to service.
Also, except for the possibility of a free loaner, I've not found that dealerships do any better work than a good independant mechanic, guess the trick is to find a good mechanic (and that can be quite a trick).
There is no dark side of the moon really, matter of fact it's all dark
but soda machines charging more when the weather's hot is nothing new
Marketing, marketing, marketing. See, you shouldn't tell people the machines charge you more when it's hot, you should tell them they get a discount on soda when the weather's cold.
We don't have a state-run media we have a media-run state.
Utilitarianism does not have to be materialistic. If the sense of unfairness makes most people unhappy more than they are helped by the economic advantages, it can still be wrong under the utilitarian principle.
But consumer demand used to be measured across an entire market. What companies want to do is treat each consumer as a separate market.
I'm no economist, but it seems to me that effective competition requires that consumers be able to comparison shop. Price-obscuring bundling, described in the article as a form of discriminatory pricing, makes comparisons difficult to impossible.
And so...business is starting to tell buyers "Your business model is obsolete because of technology, and there's nothing you can do about it!"
Hey file sharers, how's that shoe when it's on the other foot?
If you are flying on business, you don't care about price because the company is picking up the tab. You won't walk away. The airlines know this and use it to their advantage. All this on top of needing to fly soon. I don't care how soon you want to fly, if you come in through a business account, you'll pay more.
...and buyers have the right to put away their wallets and hit the sellers where it really hurts. A company that tries this and faces consumer backlash will drop this in a hurry. Price discrimination depends on A) having a lot of accurate data about individual buyers and B) buyers not sharing this information. The cost of collecting and maintaining all this individal data is going to far outweigh the profits after consumers figure out this scam and hit back.
They weren't charging you more because they thought you were rich enough to own a Jaguar. They were charging you more because you were dumb enough to buy one in the first place.
Life in Orange County
Since when is 'From each according to his means, to each according to his needs' the "holy grail of capitalism." Adam Smith is spinning in his grave.
Cokes smart machine raises the price of their malted battery acid on hot days simply because of good old supply & demand. The machine has no idea how much you make.
And there's another aspect of the information economy he's ignoring that stands between nosy companies & me: price-finders like pricegrabber, travelocity, etc. that provide consumers an anonymous search for the best price.
What glop. This is why I stopped reading businessweek years ago. How ironic that a magazine tailored to business should be the most anticapitalist rag this side of The New York Times.
Bah!
---Democracy is two wolves and a lamb voting on what to have for lunch.Liberty is a well armed lamb contesting the vote.
And heaven help you if both types of customers have an open forum to discuss your prices together and figure out what you are doing to them, ala Amazon.com. While price discrimination is indeed a growing problem, and is becoming a more personalized problem, I think the inherent 'open-forum' nature of the internet will give the potential to nip this in the bud once people really start talking about this stuff. And all of the price tracking sites will also aid our cause with this.
Buy Steampunk Clothing Online!
the majority of people I dealt with who saw the car decided that I was obviously stinking rich
Well, having looked at your website, and noting that despite totalling one Jag, you were able to buy another one, and that you also drive a Miata and a brand new Mini (that's 2 sports cars and a luxury car, by my count), sorry to break it to you, but you ARE "rich." Or at least, richer than 95% of the rest of the population. Suck it up.
Like woodworking? Build your own picture frames.
I don't have a luxury car, but I do prefer to bring my car to the dealer rather than "Joe's Garage." It costs more, but it's worth it.
No it's not. This must be your first car, am I right? You'll learn eventually that there's nothing special about the dealership, except maybe they'll give you a copy of today's paper (estimated cost: 75 cents) while they work on your car. Of course, you'd save hundreds by going to an independent shop, and if it's a shop that happens to specialize in your make of car, their mechanics may even be more knowledgeable, but you wouldn't get a copy of the day's paper.
I ditched the dealership a year ago, and I'm glad I did. They were really nice people, no complaints about the service, but sorry, money talks. I get quality work done at an independent specialty shop, for significantly less money.
Like woodworking? Build your own picture frames.
so what? same difference.
Much of the social status of being rich (vs. poor) comes from the blow-through-the-dough-and-don't-have-to-care (vs. sweating every penny) lifestyle & attitude. Though the almost-poor are more likely to do impulse buys (and charge it), while the almost-rich pay more attention to price.
>The problem is when companies gather information about you in order to either raise or lower prices for you.
you state that as though it is obvious. WHY is this a problem?
Supply contract. When your demand for something varies widely and you need to lock in a price you sign up for a supply contract. You do this all the time, like getting ten cents a minute for long distance. There is no reason you could not have a supply contract with a drug company (or rather pharmacy because of prescription laws) that guarantees your price for insulin each time you buy it. You can also get a drug card to go along with your health insurance card that has a pre-negotiated price for insulin that you can use at virtually any pharmacy.
You do not need to rely on business people being ethical, nice, or caring.
Stuart Eichert
Now I'm no car expert, but I'm pretty sure a Mini can't be considered a "sports car" by any reasonable standard.
Also note that that's three cars for two people, not one. Hell, my GF and I currently own three cars and we're definitely not rich (it's really only because I just bought a new (used, actually) car and am in the process of selling my old one).
I like my women like my coffee... pale and bitter.
The quality of dealerships varies widely, as does the quality of independent shops.
... might be a different story when stuff starts to break.
I've been fortunate to find a dealership for my car that does excellent work, and prices that work roughly at levels you'd pay at a good independent shop (their quotes are usually within 5% of the other places I've checked). The other advantage is that dealerships usually give you a free loaner car while they work on your vehicle. So far I've only had general maintenance done
A good independent shop is hard to find. In fact, in my life I have one been to one independent shop that did work I was satisfied with.
I want to buy lots of cool stuff as cheaply as possible. Just slightly above your cost to make it and distribute it to me.
Here's a real-world example of this; match.com wants $25/month for any real access to their site.
To me, it's not worth that much...but after digging around for a way to cancel the account, and finally succeeding, I was immedately given the chance to get 2 months for $25. That was followed a few days later in email with 3 months for $25.
Care to guess what I think of match.com?
This is the Soviet version of capitalism--exploitation and greed. All this does is ruin the markets. Too bad the schools in the US are teaching Soviet values.
In successful capitalist contries and the old US, capitalism is/was based upon trust and efficiency.
A bank could loan money and have a resonable expectation the person would do everything they could to pay it back. In today's US, half the people don't even care. Like my roommate. When he was working, he just took out countless loans and never payed them back. It was like free money to him.
Many of the problems with overreaching copyrights, patents, and trademarks are caused by this attitude. They think they have the right to take money from people for "thinking of" a basic common idea. Just about anyone would be able to think up most of these ideas with very little effort, yet their right to do so is taken away.
Exactly, I didn't even need a consumer group to figure out Amazon was discriminating against me. I'd be logged out and looking at their site, see something I liked, log in to put it in my cart, and next thing I know it's twice the price and more expensive than any retail store (not including shipping). I thought their server was messed up, so I just stopped shopping there. Though I had to see the big story a few months later before I fully understood what they were doing.
Have a look at this site they say, much about Mach 3 razorz and RFID,
they claim "Gillette shelf photographs unsuspecting shoppers!" and they have some pdf files here, and here to prove that Auto-ID Center is invading your privacy. There is also a (mirror) Video here which is currently on auto-id website here.
Love Music? Got a Band? Are you a Label? http://garageradio.com
Price discrimination only works when you have vendor and manufacturer colusion. In the case of bubble gum, it works well. Go to any grocery store and you will see the same brands. Try to find Penguin mints or a reasonable selection of beer. It's not that others are not making these things. Did you see a fall in the price of coffee though one of the worst wholsale coffee busts ever? I didn't either.
With databases and individual identification at purchase time, this can get personal. "Discounts" are offered to people with lots of money to spend, but they come at a price to those who don't. When there is complete colusion and a real lack of competition, the discounts fail to reach fair market value. Even the winners in a situation like that are being screwed. Las Vegas is a pioneer in this effort and it fits their morals: offer "something for nothing and take them for all their worth". It's disturbing that others would follow instead of making something worthwhile and selling it for an honest price.
Consumer lazyness helps those who would screw you. I can't get my own wife to drive a little more to the produce stand she used to work at. Instead, she mostly goes to the big chain store with her little black "reward card" to be shorn with the rest of the sheep. Ugh!
Oh yeah, it all works through greed. Your desire to screw Bill Gates enables others to screw you.
Friends don't help friends install M$ junk.
Here, one of the retailers has named their ugly black card the "rewards card". When they tell me that I would have saved x on my purchase, I say something like, "No, your punishment card system cost me that money. It's why I don't shop here much anymore."
Friends don't help friends install M$ junk.
Website's a bit out of date. We currently have two cars - one Mini Cooper and a Subaru Impreza Turbo. The Miata referred to on the website is described as a "gorgeous Mark 1", in other words it was nearly ten years' old. Sadly it had to go, as we're having a second baby and there's no room in the Miata. The Impreza takes its place, having four doors at least. The Cooper is new, but the Impreza is a couple of years' old as well.
So not rich. If I moaned, people would laugh at me and rightly so - I accept that I'm doing ok. But certainly not as rich as these people were believing me to be - remember, a new XJR goes for 70k+GBP brand new in the spec we had it, and that's probably the figure they had in their mind. Its actual monetary value however was just 7k GBP after seven years, and we bought it when it was five years' old.
Cheers,
Ian
Actually, perfect price discrimination (everyone pays their exact marginal value for the product) and perfect competition are the only ways to met everyone's needs without losses. In one all the benefits flow to the producer in the other all of the benefits flow to the consumer. In both cases no one gets screwed, but the first goes against our human belief of fairness.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Imagine a world where everyone is aware that prices for items fluctuate depending on your buying habits. Consumers won't consume! They'll get a clue and choose to save their money for special purchases so they won't be reamed for being classified as "impulse-spenders" or "electronics-junkies." They'll think before purchasing junk they don't need. The environment is saved! The economy tanks! Hooray! A bizarre new world order replaces the current.
If we put a little thought into each and every one of our purchases, I bet we'd see how little we actually need to get by. People would work less hours, be less stressed out, and the world in general would be a better place.
The awesome part about all this is that all the crap, the junky products that make up the bulk of our purchases like the IKEA cardboard furniture, the cheaply made shoes that fall apart, the food that gives you heart disease -- it gets left on the shelf because you have to really need to want it to risk the prices of everything else going up for a while.
Maybe I'm understanding this incorrectly, but I find it odd that this discriminatory pricing is a "holy grail of capitalism". I can understand how it would benefit a corporation (at least in the short run) to wring every last penny out of its customers, but think about it from a slightly different angle:
Assume for a moment that consumers place the highest value on specific goods, like water, food, housing, and transportation. Assume also that fringe goods (computers, clothes, entertainment) must, by definition, be valued lower than more basic goods. In an economy where pricing of basic services is discriminatory, the providers of basic goods will be able to raise their prices on an individual basis, according to the consumer's ability to pay.
Given the nature of these goods, the providers should be able to raise their prices to consume all of their customers' available income. There are no substitutes for these goods, and if there were, presumably they would be priced similarly.
In this extremist's scenario, *everyone* would be living below the poverty level, with NO discretionary income. All of their income would be consumed in purchasing these most basic services. And what would the companies be gaining from this? Nothing -- all their money would just mean they pay more for their basic goods and services. Sounds a lot like communism to me, but this would gradually degrade into an agricultural society as people lose their jobs when no one buys their products.
In a less extreme scenario, the disparate discretionary income of consumers at different income levels would, in theory, be able to purchase only the exact same relative value of goods and services, even the CEO's of the megalithic corporations with all their money. Wow. That still sounds like communism.
Capitalism is built on my ability to consume more than you because I (presumably) contribute more to society than you, or vice versa. Anything that upsets this delicate imbalance undermines our very way of life. I will grant you, though, that this is a great argument against Adam Smith's "Invisible Hand".
--Jasin Natael
True science means that when you re-evaluate the evidence, you re-evaluate your faith.
The article was about price discrimination, coke machines that change prices on a hot day, coke machines that are priced higher because of location in the Ritz lobby (or a lower price in an old folks home), and your Coke machine that collected personal info to set prices are all examples of price discrimintation. Each describes price discrimiation to a different degree. Incidentally, this isn't just a soak the rich thing, price discrimination is about extracting the value derived from the good or service. There could be goods that go up in value regarless (or even inversely to income). At that point pricing becomes much more tied to game theory, as individuals seek to benefit from the rules of the system, witness the use of two round trip tickets to save money on a single (identified as high value user) ticket.
I would have summarized the article as one aobut the legal and social structures and beliefs that that limit an organization's ability to price discriminate, and found it ironic that prices for freight shipped increased after price discrimination was eliminated (after falling during much of the outcry period).
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Yanno, this could already be practised easily enough by such "evil corporate types" as, say, Joe, the guy who owns and runs the shop from which you buy your coffee. Since you and he often chat at the till, he knows that you're really into gourmet coffee, and so's the wife, so he gives you a slight discount on coffee. He knows he'll turn a profit anyway on sheer quantity, and it's both a friendly gesture and a good way of keeping you loyal.
Oh no, "price discrimination"! Cue wailing and gnashing of teeth by varous commies and other procrustean egalitarians.
Now suppose this "price discrimination" became more widespread. Busineses don't give away free money, especially big ones. If they cut the price of something, it wil be for a reason. Mostly what they're paying for is reduced risk. Businesses have to set aside money against contingent risks such as overstocking. When they give you a reduced price, it's most likely because they can reduce their risk if you're a customer. Since you always buy coffee, the risk of overstocking goes down. Scale this up to the economy as a whole, and companies waste less money, can use more, and the economy benefits as does anyone seeking a job, etc.
"Price discrimination" this way already exists, but mostly it's geographic. Live in a neighborhood of thugs, and you carry the cost of their depredations, via raised local prices.
While a lot of people are mentioning this as a comparison, can anybody explain the concept behind this (why it is done). While I realize that a lot of seniors are on pension without large income, many are not, and a college student struggling with loans etc isn't exactly doing well either.
A lot of places do offer students discounts too (buslines, etc), mind you, but not as many as off senior discounts.
I've found that dealers are only slightly more expensive than other mechanics, but often not as good. Remember, the dealer is the most likely to hire fresh out of high school kids and teach them to be mechanics. The good ones either start their own shop after getting expirence, or are offered a job paying more money by a mechanic who runs his own shop. The dealer is stuck with the kids who don't yet know what they are doing, and those older folks who are not bad enough to fire, but not good enough for someone else to hire away.
In the end though, there is only one mechanic I trust, and that is myself. I may not know as much, but the manufacture publishes a very good repair manual and I can figgure it out from that. I may be slower, but if I take three times as long to do the work I still break even while knowing it was done right.
I guess it's a matter of preference. Some people will pay a little extra to have work done that is backed by a Big Corporation rather than Big Joe.
TodayTM BillyJoelTM GoogleTMd for StitchTMes due to WindowsTM while RollerbladeTMing with an AppleTM and a PopsicleTM
They already kinda do that, by selling practically the same item under different brands or different models.
"Hot lesbian witches! It's fucking genius!"
I believe I have now seen the error of my ways.
The thing about things we don't know is we often don't know we don't know them.
As near as I can tell, what is offensive in price discrimination, is when I get charged more if they know who I am than if they don't know who I am. It's also a offensive if I can pay less total if I purchase a little more, but that's just a matter of ill-tuned formulas.
Getting charged more to preserve my privacy is OK. Getting charged more because of how the product will be used is OK. Getting charged more for a brand name is even OK. Getting charged more per item for purchasing small amounts is OK.
What am I missing? It would be offensive if a net worth of $1000000 meant less purchasing power than a net worth of $1000. What else? What's the simplest definition of what's bad about price differentiation?
Welcome to the circular nature of economics...specifically with relation to a laissez faire style capitalist market. (Disclaimer: IANE) Let's look at the most extreme hypothetical: A true capitalist market is set up (little or no government controls or regulations constricting business practices). Companies are allowed to compete and grow. Over time, the weakest of these are weeded out through buyouts, bankruptcies, etc. Remaining out of the ashes of the economic war (which is basically what laissez faire capitalism becomes) are a handful of companies addressing a specific part of the market. Over time, this number decreases through what amounts to an economic darwinism where the profitable survive, and everyone else is left indebted or whatever. As competition dwindles, the companies can do whatever the hell they want, from price-gouging to this example of discriminatory pricing. I could see where it would start as something small and then get disastrously ot of hand, devoloving into a type of scenario as the parent suggests. And then, when it gets its worst, you wind up with a market-imposed communism. Interesting concept...hopefully no one would actually be stupid enough to try this...
#define CLUE 0
You are obviously unfamiliar with the concept of greed.
If there is a free market, competitors at each step in production will drive prices back towards where they belong. Think about it: If all the other stores are charging 33% of ones monthly income for a months worth of food, I can charge (33-x)% and still make more profit if the lower prices attract more customers.
On the other hand, when there are only a few firms producing a given product, they can charge pretty much whatever they want (especially if they are allowed to fix prices).
Come test your mettle in the world of Alter Aeon!