Online Shoppers Naive About Online Prices

smooth wombat writes "Have you ever been shopping online and noticed the difference in prices for the same item at different stores? Do you realize that not only are the prices different from store to store but they could be different for you compared to someone else who shops at the same store? Nearly 2/3 of adult internet shoppers thought that practice was illegal according to a study (pdf format) conducted by the Annenberg Public Policy Center of the University of Pennsylvania. First-time buyers at a retailer could see higher prices than a firm's repeat customers, and retailers may not offer discounts to consumers who buy the same brands regularly without even looking at alternative products on the same site. From the article: 'The Annenberg study was based on results from a telephone survey from Feb. 8 to March 14 of 1,500 adults who said they had used the Internet within the past 30 days. The margin of sampling error was reported to be plus or minus 2.51 percentage points.'"

Comments

Really? I don't believe it.

[ylikone]

I have multiple computers in my home and use the primary one to make online purchases, yet I have never noticed a price discrepancy when browsing the same items at the same online shops using my other computers.

Somebody please provide a sample site that does this.

Happens within the span of about five minutes.

[mosel-saar-ruwer]

How prevalent is this practice?

I've experienced price changes within the span of five minutes, or less. I'll be surfing around to sites, comparing prices, and I'll return to a site I've just visited, and they'll increase the price on me [I've never seen a price decrease].

I think they program the software so that the more hits they get on a product page served to your [preset] "cookie", the more they edge the price up on you, figuring, I guess, that you're really interested in the product, and that maybe they can "scare" you into purchasing it [or maybe somehow bleed that extra $10 of profit out of you on account of your insatiable desire for the product]. And no, I don't think this is primarily a supply and demand thing - I think these price change engines are primarily driven by some [previously arcane] theory of marketing psychology. The airline/hotel reservation systems [Expedia, Travelocity, Orbitz] are particularly guilty of this [and, again, I do NOT believe that it is primarily attributable to a finite supply of airline tickets or a finite supply hotel rooms].

And of course, you also have the phenomenon of e.g. different Yahoo stores [different URLs] that have identical ownership [i.e. identical "whois" lookups], and identical inventory [and, typically, identical SKUs], but which offer slightly different prices on the very same items. Or merchants whose "normal" price on an item differs from their "advertised" price at e.g. pricewatch.com.

Generally speaking, these kinds of gimmicks really tick me off, and tend to push me towards a site's competitor [assuming they aren't playing the same damned game] - and it sure doesn't make a damned bit of difference to me whether I purchase that ticket from Expedia, Travelocity, or Orbitz.

Illegality and the Robinson-Patman Act

[Otto]

What you are talking about economists call price discrimination and it is not only not illegal (in most cases)

I would argue that it's possible to interpret the Robinson-Patman Act in a way such that price discrimination like this *is* illegal, in the United States. It may not be prosecuted much, but the law seems pretty broad and could be interpreted to cover this sort of thing.