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Google Patents Profit-Maximizing Dynamic Pricing
theodp writes "A newly-granted Google patent on Dynamic Pricing of Electronic Content describes how information gleaned from your search history and social networking activity can be used against you by providing tell-tale clues for your propensity to pay jacked-up prices to 'reconsume' electronic content, such as 'watching a video recording, reading an electronic book, playing a game, or listening to an audio recording.' The patent is illustrated with drawings showing how some individuals can be convinced to pay 4x what others will be charged for the same item. From the patent: 'According to one innovative aspect of the subject matter described by this specification, a system may use this information to tailor the price that is offered to the particular user to repurchase the particular item of electronic content. By not applying discounts for users that may, in relation to a typical user, be more inclined to repurchase a particular product, profits may increase.' Hey, wasn't this kind of dynamic pricing once considered evil?"
You can patent something truly horrific, then not use your patent or let anyone else use it. Hopefully that's what they're going for here.
It's not that we expect things at any particular price. It's an expectation of basic fairness: that the store won't quietly double their normal prices just because I'm wearing a suit when I walk in, in the hopes of getting me to pay more than they'd normally charge.
And I've seen price discrimination backfire. When I lived up in northern Nevada, I remember the story (straight from the cowboy involved) of the scruffy cowboy who'd pulled up to the lot in a rusted-out beater truck and started looking at the expensive trucks. The new salesguy who'd "got stuck with him" tried arguing with him and pushing him towards the used cars. The cowboy was pretty adamant, and finally got mad and left. The salesguy figured no great loss, and he didn't have to deal with the stink of cowpies anymore.
Next day, the owner called all the salesguys in and called the new guy up front to congratulate him. On costing the dealership the sale of 15 brand-new pick-up trucks to a ranch's fleet. Plus loss of the maintenance on that ranch's fleet. Oh, and the loss of all business from one of the local drilling companies. Turns out, that scruffy cowboy? Was the owner of the ranch and drilling company in question. He'd just come in from helping fix a broken truck and bringing in some cows that'd gotten out, and was looking to replace all his trucks before he had more breakdowns. He was driving the beater truck because that was the one available to run out and take care of the problem, and he'd decided if that was the way he was going to be treated then he'd just take all his business somewhere where they had better manners. Oops.
Now imagine the owner of your company listening to a couple of his friends complain that when they went to buy something for their kids from his company, they were seeing prices a lot higher than what they knew other people were paying, and they weren't happy about it. Do you think the owner's going to be happy with you for getting his friends mad at him because of this new pricing scheme? Didn't think so.