The behavioral cost of personalized pricing

Personalized ad targeting and personalized pricing are both predicated on mass surveillance and then leveraging that for manipulation. Both sides of that toxic combination are compounded in significance due to severe two-way centralization of those markets.

The result is leverage pervasively used to select information competitive with customer value. And also used to drain margins from ad buyers and all upstream economic input.

People complain endlessly about the downside to surveillance and personalized manipulation, but don't seem to have an appetite for more than that.

I view the centralization, surveillance and manipulation as all ethical problems, because they all involve negative externalities (weaponizing unpermissioned or dark-permissioned information, manipulating people based on their past behaviors and characteristics, and bleeding product providers).

Scalable ethical problems that pay, are not resolved by any means that don't resolve the ethics with economics. I.e. law or hard regulation, backed up by considerable fines ensuring risk-reward losses for perpetrators, and criminal charges for serious or repeat offenders.

Given the tremendous centralization and privacy violations, the problem is orders of magnitude worse than normal price fixing.

There was an article about targeted advertising a number of years that really changed my perspective on it called, "Targeted Advertising Considered Harmful": https://zgp.org/targeted-advertising-considered-harmful/

The basic idea is that the real value in advertising is as a signaling mechanism, and targeted advertising removes most of that signal.

I feel like personalized pricing has some of the same issues, in that it erodes consumer trust and makes it more and more difficult for consumers to confidently spend their money in the market. I am not sure how we fix the problem, though, because it is a collective action problem; any individual company will need to use personalized pricing to compete, but that behavior will hurt the economy as a whole.

I don't know the solution to this problem.

Price discrimination is bad. It's worth trying to ban. You'll never stop 100% of it (and trying to go too over-the-top in terms of stopping it would not be worthwhile), but this is a useful area for regulation.

> Who knows why? I’m usually more willing to spend than she is, and I bet that's represented on my user profile. I was paying with a gift card, which surely contributes. Maybe it was a price scraping update, comparison shopping detection, or a system that explores “face-in-the-door” high prices before backing down. From the outside, no one really knows.

The most obvious possibility omitted is that your wife got the first, easy, cheap car and then Uber had to quote you a higher price to get a second car. Cars don't fall from the sky; if two people successively ask for bids, how else could it work? What if the app quoted you both the cheap price for the only car within X blocks, and you bought it before she did? Is it suddenly going to go 'oops sorry, changed my mind, it now costs twice as much'? Sounds like a very bad experience to me! More sensible to give the first person a low quote and then when - unexpected and unpredictably - someone requests something similar, quote them the higher price reflecting the sudden local micro-shortage.

I wish it were easier to have ephemeral interactions with companies. Why do I need a tracked and maintained user profile for things like Uber? Shouldnt it be possible to only interact for the single transaction, ending as soon as I leave the car.

I imagine trying to continuously cycle accounts will run into various blocks, e.g. you can't sign up using your email/phone/credit-card because it is already linked to an existing account.

I hate the way the world is going. As the article states, Uber can probably classify my exact spending habits to maximize a price I'm willing to pay for. But id much rather them have to treat me as a new soul every time, and hopefully along those lines have to fight a bit harder to get my business.

A lot of the theoretical underpinnings about why capitalism is a good system are based on the law of one price. Especially in the context of an oligopoly, being able to price-discriminate on such an individual level leads to really bad outcomes.

is https://en.wikipedia.org/wiki/Price_discrimination very different from buying things off ebay? why would salespeople even exist if there was perfect information?

so people want efficient markets and price discovery..but only when it results in them paying lower prices? otherwise the law should step in and preferably set prices by fiat or magic?

ok my personal take on buyng knick knacks in chatuchak is.. assume everything is cheap , thats why i come to thailand, i can afford this...

New job: poor person personal shopper. Someone with a "poor" profile follows you around the store so you can use their quoted prices instead of your own. Or travel agents that only book flights for you using early-2000s flip phones, shielding clients from the iPhone premium price.

Might be a good idea to get a cheap secondary Android phone to avoid having to pay the iPhone ecommerce/digital tax that companies like Uber will upcharge you for.

aside from everything else this seems ripe for abuse of people with cognitive disabilities

This is why I rarely join those 'customer loyalty' programs that almost every store offers.

I say 'no thanks' when the cashier wants to know my phone number, even if I am paying cash.

It is almost impossible to remain anonymous in the consumer space, even if you are really trying.

I'm wondering whether or not the attitude towards shoplifting and the like is going to loosen with more and more dystopian shit being pushed. I can imagine a world where small amounts of shoplifting become somewhat acceptable because every single shop is part of some corp, and every single corp in the biz is hostile by default.

Is it clear that this will not go in a direction that actually pushes back on wealth inequality?

It seems distasteful on the surface of course but could it be macroeconomically a good thing?

Obviously the fatal flaw is that capitalists are running it for their own gain but logically how would it play out?