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."

Comments

Well...

[cheesybagel]

Bill Gates also used to think his MSN proprietary network paywall would have more success than any silly Internet thingie. What he fails to realize is than in an Internet era, where price information travels rapidly, prices converge towards fixed prices. Not this drivel.

Isn't this a business method patent?

Re:Well...

[Anonymous Coward]

It think the point of this patent is that those people who are "less influential" will not have the means to tell the world they have been ripped off.

Re:Well...

[Anonymous Coward]

When you have many "less influential" people talking to each other and complaining about the same thing, you suddenly have an "influential" mob

Should fail due to prior art.

[Sebilrazen]

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.

seems dangerous

[Trepidity]

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.

Re:Already an established business practice

[BrianRoach]

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.

Meh. There's prior art...

[msauve]

this is exactly what the US Congress has been doing for years (Price-Gouging the Least Influential).