alt Hacker NewsEverybody knows the cows are not actually spheres. It's about how you deal with it.
If you try to sell "return insurance" then some customers don't buy it but end up wanting to return it anyway and then leave you a bad review for not having free returns. That costs you more than charging somewhat higher prices and having free returns, so that's what you do instead. But now efficiency requires some other mechanism of allowing the people who don't do excessive returns to pay a lower price.
Also, suppose you actually did sell return insurance. Then you notice that a subset of the customers who buy return insurance rarely use it, so you want to give them a discount to try to get more of their business.
Your idea of charging less to customers who know what they want is also a spherical cow.
They’ll buy your entire life from a data broker and charge you more because yesterday you accidentally viewed some Lamborghini seat covers. They’ll calculate that you have less willpower on Thursday nights and change their advertised price from $10 to ON SALE $2 off $12. They’ll just do coincidentally use the same algorithm to determine their price as all the other stores do so they don’t have to worry about competing on price.