Slashdot Mirror
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?
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.
I have an easy solution to that. Anyone who tries to sell me MLM stuff ceases being my friend.
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
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."