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Microsoft Invents Price-Gouging the Least Influential
theodp writes "In the world envisioned by Microsoft's just-published patent application for Social Marketing, monopolists will maximize revenue by charging prices inversely related to the perceived influence an individual has on others. Microsoft gives an example of a pricing model that charges different people $0, $5, $10, $20, or $25 for the identical item based on the influence the purchaser wields. A presentation describing the revenue optimization scheme earned one of the three inventors applause (MS-Research video), and the so-called 'influence and exploit' strategies were also featured at WWW 2008 (PDF). The invention jibes nicely with Bill Gates's pending patents for identifying influencers. Welcome to the brave new world of analytics."
Isn't this a business method patent?
Hey, works for me... Microsoft gave me a free copy of Windows 7 Ultimate 64 bit for hosting a Windows 7 party... I am influencial, I get free software!
I'd swear that's what the merchandise bags they give out at movie premieres are. The celebrities get stuff free, wield their influence over those susceptible to influencing who rush out and buy it. $0->$x.
"There are no facts, only interpretations." --Friedrich Nietzsche.
Approaches like this are pretty direct attacks on why free markets work. Almost all classical and neoclassical economic theory assume things like the existence of a supply/demand price curve, availability of pricing information, etc. If you have some nutty system where price curves aren't really defined beyond an individual level, prices aren't widely available, etc., all the usual pricing signals, resource allocation by the "invisible hand", etc., get a lot more muddled, and probably begin to break down.
Of course, that's certainly a reason I can see Microsoft wanting it: finding ways to profit other than "make a good product and compete fairly on the open market" is their modus operandi.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Let's all friend each other on Facebook...the entire /. community. We will all be considered exceptionally influential and will therefore be given free stuff.
So if this is the future...where's my jet pack?
1. Become influential or join together with a group of influential friends.
2. Buy things very cheap.
3. Sell them at a higher price.
4. Profit
In fact, you could set up a brokerage business where you find people that have cheapest access to things, offer to buy from them at a slightly higher price than they pay, and sell at a higher price to groups that would have to pay even more. Lots of profit opportunities here.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
Influence mapping scares me deeply. It completely devalues the entire concept of friendship, turning every relationship into a marketing channel, every person into a spambot zombie hoping for a discount from sellers or a better performance appraisal at work.
I would love to see the practice outlawed, but data mining is becoming so pervasive I don't know how you prove its even happening without catching differential pricing caught in the act.
If you receive a more preferable product for a good or service based on your social network status (or on your blog), you have to disclose that, according to the FTC.
You aren't allowed to get a better price based on your influence/following and fail to disclose it.
This type of pricing scheme is dangerous, and might land company executivies in jail, for the attempt to defraud less-influential people with higher pricing.
However, I expect this could backfire... some of the more influential people will certainly say what price they got.
You can't control this type of information. There will be a backlash / disillusionment when other people learn that they are getting a different price.
In fact, the "more influential person" may lose influence, when people discover that.
E.g. Getting the better price can have long-term social costs in how other people in your social network view you.
Good Advise vs. "Sell-out"
And someone just said yesterday that the privacy policy of Bing is better than the one for Google.
Looks like they have the next few revisions already in mind, with substantial changes.
Assorted stuff I do sometimes: Lemuria.org
I would assume that the open source movement has a mole within Microsoft, because this looks like a big win for open source software.
This is the most evil plan related to software that I think I've ever heard. Their plan is basically to prey on the weak. Are they going to patent stealing candy from children next?
Exactly. I also don't see where this is new or innovative, except that it's (presumably) on a large scale.
When I ran a motorcycle shop, we did this all the time. You know the local customers who bring in other business, often times not even consciously ... they do this because they have a "social influence". So ... you give them cheaper prices. The business they bring in more than offsets that discount.
With amateur racing, it's called "sponsorship" even if you're not giving things to racers for free. Give a fast guy parts at dealer cost and a break on labor, and he tells other racers how great your are.
In the "big leagues", companies PAY people to use their products because, well, most people are sheep and buy stuff simply because some "star" wears / uses it.
Nothing new to see here, move along.
A pretty close one: having the option to disable slashdot ads based on user karma.
this is exactly what the US Congress has been doing for years (Price-Gouging the Least Influential).
"National Security is the chief cause of national insecurity." - Celine's First Law
One bad review posted to a web forum can have a huge effect. When multiplied by 1000, I would expect the consensus view would be that few people would buy a product - if they saw that many bad reviews or negative votes or a given product. These guys had better be very careful about who they decide is not influential, they could just find that there's a difference between how motivated individuals are to spread good news about a product and the lengths others will go to if they feel they've been hard done by.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Outrage prompts Amazon to Change Price-testing Policy: "Last week, Computerworld first reported that Amazon was conducting various price tests in its DVD store that could result in one consumer paying as much as $15 more for the same item as another consumer."
With Windows 7 release.
'Influential' people (loud online and offline how Vista sucked) and enthusiasts (basically same as first group) were given discounted versions of Windows 7 (win 7 parties, pre-release discounts, school discounts, etc.)
And they all took the bait, told the world how Win 7 is great... and guess what? You can't buy discounted version, you have to shell out $120 for cheapest upgrade. The student version offer is about to end as well, and family upgrade option 3-for-150 has been discontinued.
Sadly, it works, now everybody wants or considers Windows 7.
I sure hope that most linux users are not in there only b/c of the price in $. IMHO, linux is not just a price tag, it's a philosophy, a way of being!
I don't think the clothes I buy at Target are worn by a "star" ... but I could be wrong, mainly because I don't pay attention to such things. I buy clothes there because ... I like the styles, and the prices are cheap. I discovered this simply by walking past them in the store.
The mind is a complex beast, but what we do know it's associative. For example when you hear a particular song, you might suddenly find yourself thinking about some special time they played that song. Those emotions "rub off" on the song itself and makes you feel happy just hearing the song. It's the same with ads, you're not going to like take commands from ads. What it will do is link these products to people that are cool, rich, famous, sexy or funny so those thoughts will rub off on the product. In a way, the mind is much better at remembering this than our conscious stream of thought - we'd be overwhelmed otherwise - and the marketers know to use it. You think you're looking at the product, but your mind is really pulling up these associations that say "cool people wear this" and believe it or not, it's what makes people pick one shirt over the other almost similar shirt in the other rack. If people realized they'd feel like a puppet on strings and very few want that, I think it's more likely you've been well marketed to than not marketed to.
Live today, because you never know what tomorrow brings