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Why Do Gas Station Prices Constantly Change? Blame the Algorithm (wsj.com)
Retailers are using artificial-intelligence software to set optimal prices, testing textbook theories of competition, says a WSJ report. An anonymous reader shares the article: One recent afternoon at a Shell-branded station on the outskirts of this Dutch city, the price of a gallon of unleaded gas started ticking higher, rising more than three-and-a-half cents by closing time. A little later, a competing station three miles down the road raised its price about the same amount. The two stations are among thousands of companies that use artificial-intelligence software to set prices (Editor's note: the link could be paywalled; alternative source). In doing so, they are testing a fundamental precept of the market economy. [...] Advances in AI are allowing retail and wholesale firms to move beyond 'dynamic pricing' software, which has for years helped set prices for fast-moving goods, like airline tickets or flat-screen televisions. Older pricing software often used simple rules, such as always keeping prices lower than a competitor. These new systems crunch mountains of historical and real-time data to predict how customers and competitors will react to any price change under different scenarios, giving them an almost superhuman insight into market dynamics. Programmed to meet a certain goal -- such as boosting sales -- the algorithms constantly update tactics after learning from experience. Even as the rise of algorithms determining prices poses a challenge to anti-trust law, authorities in the United States and Europe haven't opened probes or accused anyone of impropriety for using AI to set prices.
Well, at least half of what you're suggesting is here: https://www.gasbuddy.com/
A little but the average person has a consistent schedule. They drive by the same stations at the same time 5 days a week.
It is tough to alter real life schedules enough to take advantage of lower gas prices at noon when they raise the rates 3 cents a gallon between 6-9 am and 4-7pm every week day and 5 cents a gallon on the weekends.
i thought once I was found, but it was only a dream.
This post is only half tongue-in-cheek.
Gasoline is arguably more important and more of a daily necessity than health care. We need gasoline reform! None of this daily price change, guessing if you have enough change in the seat cushions of your car to fill your tank or not.
Down with the days of filling your tank, only to have the price drop $0.10 a gallon the next day, robbing you of the $1.50 you would have saved had you known the price would drop and you filled up in the morning after instead of the evening before!
We need price stability for gasoline - something like "no more than a 1% change per week, no more than a 1% change per 25 miles. That is - limits on how fast the price can change with respect to time and space.
Related: Since the price of a barrel of oil is only about $45-$50 right now - why does a quart of (non-synthetic) motor oil cost $7!? That's an equivalent price of close to $1,200 a barrel!
"There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)
when you're on your way to work with no time to stop and gets more expensive after work.
This is yet another good example of how the free market isn't. The entire situation is asymmetric. Companies have more information and control supply. If there was more competition maybe, but between buyouts left and right (thanks to enormous cash reserves left from decades of not taxing anyone) and the simple fact that they can watch each other's prices... well the whole system's busted and I don't see anything fixing it short of UBI + single payer healthcare or the like putting power in consumers hands by ensuring basic needs are met.
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And certainly not whether it's an English gallon or whether they've been short-changed with an American 'English units' gallon!
Nothing in your grocery store is like that; there is lots of supply/demand, seasonal, and loss leader pricing.
Around here, I see a lot of similarly wildly varying grocery store pricing that segments the market into the price-conscious and the price-oblivious. Big discounts every 2-12 weeks so that the canny can stock-up and avoid being driven to cheaper brands, while in-between, big margins are extracted from the wealthy, uninformed, busy, and unorganized.
I use GasBuddy all the time, but whenever we have an out-of-the-blue 10-15c price spike in South Florida, there's a good chance that even the stations it shows with the cheaper price will have spiked too unless they've had a report within the past 15-30 minutes... after 1 hour, you might have 50-50 odds of getting the lower price. After 2 hours, forget it. A few weeks ago, we had one of those spikes... almost simultaneously, every station suddenly spiked from $2.21-2.35/gallon to $2.39-2.54.
Logical conclusion: 21st-century TVs are built like shit
Same with cars. I have seen a working Ford Model-T over 100 years old, but I have never seen a 100 year old Tesla. They just don't last like they used to.
That is not correct. Tacit collusion (keeping prices above the competitive level without explicitly communicating with your competitors) is illegal as well, but it is of course much harder to prove.