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Picture this:
- You type on Google “laptop won’t turn on”
- Google now knows you have a broken laptop and can estimate how desperate you are to fix it.
- Because it knows how desperate you are, it can increase shop prices proportionally.
You are going to pay the maximum they get you to pay.
That’s algorithmic pricing.
The more companies know about you, the more they can predict and sell how desperate you are to other stores out there.
An internet-connected car knows much more about you than you realize. A smart TV also knows what you like. Your Alexa knows if there is a problem in the home.
Privacy is much more than just sensitive data.
It’s about not giving leverage away.
Because algorithms will use it against you.
Be safe out there.
I can see how this would be a concern in theory but currently google can’t even find me the products I’m looking for even when I type in exact parameters so we’re a long way off from it predicting not only what you need but how desperate you are for it.
Worked with both marketing and tech dudes many years ago, and two things I learned were (1) marketing guys overestimate new/fad tools so badly and (2) they (in conjunction with management) can be mercylessly demanding over TI guys.
Is there evidence previous search-based algorithmic pricing is being used?
If it exists, you wouldn’t see it, because it would be proprietary. It probably does exist, but it’s useless.
They also serve you the ads with the most JavaScript bs and crypto mining so you think your laptop is obsolete and you need a new one.
Without ublock Firefox makes my PC take off
This cat with the PC running around unfettered. Scaring all the cats and dogs.
Memes are supposed to make me laugh.
This just makes me sad, and existential.
Don’t be sad.
Just be happy, problems solved. No need to thank me.
So how does this affect me when price comparison sites are a thing?
Your internet privacy affects a lot more than pricing. Someone can somehow find your information online, whether they buy it from an information broker or from some of the many giant hacks. Then they can use that information to track you down and hurt you. Also, most people aren’t looking at price comparison sites.
The economics term for this is price discrimination. Nothing to do with racial discrimination, it’s discriminating based on willingness to pay.
But usually it’s not done by raising the prices above normal it’s done by setting the regular prices higher and then offering a discount to people who aren’t willing to pay less. People tend not to get upset when it’s done that way. Student discount at the movie theater is a form of price discrimination. People accept it because they’re being nice to people that don’t have a lot of money. Seniors discount? Also being nice, I guess. But the reality is they know everyone else is willing to pay more so they charge more.
And this has already been happening online. About a decade ago I noticed what when I searched for flights from an airline then went to facebook, I’d get an ad from that airline offering a discount. Not as sophisticated as attempting to determining the exact price I was willing to pay, but it’s along the same lines.
But the problems with these schemes is that people quickly figure out the system. I just made it a habit to search for a flight, then go onto facebook to look for the discount even when I’d be willing to pay even if there was no discount. But why not trick the system into thinking I didn’t really care about booking the flight and get that discount?
then offering a discount to people who aren’t willing to pay less.
Do you mean “aren’t willing to pay the full price”?
people figure out the system
Only tech savvy people figure out how to go around this system. Roughly 80% ~ 90% of consumers will not realize what’s happening or won’t bother figuring out a solution.
Hell, even if only 10% of the consumers paid a slightly higher price the company still earns more by buying your data.
Statistics are on the side of the company. Buying consumer data is always the best strategy for them. The only thing that can limit abuse of privacy and consumer rights is government regulation.
Google “I have way too many laptops and they all work great.”
Google aggressively reduces prices on laptops to tempt you to buy more of them anyway.
You buy 3 more to go with your ever increasing pile
Is that why I see all those “I have too many ThinkPads, I just bought three more.” Posts, or is that just what part of the Internet I’m hanging out in?
Who would potential reselling business idea
“I have a compulsion to buy laptops but only when they’re less than $100”
Stonks
I came here to get the fuck away from reddit yo…
I invest all my money into laptops. When China invades taiwan and TSMC factories self destructs, I will resell them for a modest profit in the demand-heavy market. Literally can’t go tits up.
I think one of the largest Intel fabs is in Israel for god’s sake. We really do excels as a species don’t we.
I don’t believe they can ascertain how desperate you are to fix it.
“How to get an extension on phd thesis”
And it’s not just things you search on Google. Anything you type into any website that has an interest in your data or has a deal with a company that’s interested in your data. Anything you post publicly on the internet. Anything you say near any Google or Facebook software that is microphone enabled. Anything you type into messenging software run by those companies (especially if there’s no pretense of encryption, like Discord or Facebook Messenger).
And anything they collect from friends and family that might be related to you.
guess what insurance companies make money off of ?
If smart TVs knew what we liked, I don’t think 90% of what’s in the “most popular” sections of every streaming service in existence would be filled with random shit nobody has ever heard of. Unless they know what we like, and then just refuse to give us what we actually like… 🤔
You’re already paying for the streaming service. They don’t benefit off of giving you what you want in that scenario
They don’t need to recommend you the shows you already know about. They want to recommend you things you haven’t heard about in the hopes that you will find something new that you like so that show will keep you paying once the ones you already are watching are done.
This. This benefits them.
And if it fails, well again: you’re already paying them.
Meanwhile I just noticed that my mobile provider (Congstar Germany) will be completely phasing out their online customer center in favor of their app. They already removed functionality from the site, like seeing how much data you have used this month. Why? The answer is in their huge list of third-party cookies I assume.
In a past life I wrote the software that did this.
It’s not just about charging more when you’re desperate. It’s also things like charging you less to keep you addicted, or getting you hooked. Exploiting your emotions and behaviour to make it effective. A small loss on you now could be a long time gain for them.
Some more scenarios:
- you’ve decided to quit alcohol. Your social media accounts are used to identify you’re looking for advice. They advertise more, and send you heavy, heavy discounts a few days in to keep you on the wagon.
- Your cars insurance tracker has picked up your erratic driving. Your phone has tracked more forceful interactions, your works email provider has revealed you’ve been in a minimum of three meetings all day; You’re having a shit, stressful, day. They can’t give you discounts on your cigarettes but they do know they can get you to buy two packs instead of one by serving you ads that suggest stock levels are low. You buy two and chain smoke all day, your daily average goes from 0.5 to 0.7 packs a day.
- You go to a chain restaurant often. They know they can get you to buy more in the long run if they increase the volume you eat gradually. Every visit they goad you into buying more. Didn’t do it last time? Steeper discounts next time. Until one day you buy the extra side. That’s now your new baseline. A few weeks of that and back onto the stair climb. A little by little. You’re spending more and more.
- you’re on holiday. everyone knows you’re not coming back anytime soon so they charge full price. But move to a new city? Everyone has discounts for you to get you in the door.
The data available back then was pretty minimal, effectively only the data we generated. But it was still enough to prey on your lizard brain. With data brokerage I’ve got no idea what level of evils we could have done.
Thanks for ‘coming out’ about it. Without doxing yourself too heavily, would you mind to share more about the industry in particular or measurement of these practises? Dip you know if it was common (and when was this?)
I know for sure that we can’t trust companies to act in our best interests (if anything, its a hostile relationship), but I guess I’m curious about your inside perspective. Has that jaded you much at all?
Social/Mobile games. So an already predatory industry. Let’s get people addicted to a game, and then suck as much money from them as possible.
In the industry, we definitely weren’t the only ones doing it. And really we were only doing basic stuff (it was all in house developed middleware, so effort vs reward didn’t make much sense to go hard) I wouldn’t be surprised if others were going deep.
- the hardest part is getting someone to part with their money. But once they’ve done it once, even for the smallest amount, the second purchase will be easier.
- conversions that stopped playing got emails with discounts.
- whales got freebies when they lost to keep them happy.
- everything else was just finding the customers perfect price.
- ultimately we were selling noting. So any sale is better than no sale. You can’t make a loss on a number in a database.
Everything was broken down into campaigns (we’d have multiple running at any one time) targeting different segments. Then we’d track the conversion, sale, and retention numbers of those campaigns against each other. Sometimes one campaign might flop for one segment but not another, so we’d retarget with a new one.
I don’t think it’s used much in other markets. I know Twilio has Segment, that could be used to do segmented pricing but I’ve never really seen it done in other industries.
I wouldn’t say it’s jaded me. It has made me conscious of my data footprint. I don’t play mobile or f2p games. But I am weary. The COVID greed-flation showed the mindset of businesses. It might not be long until targeted pricing becomes worthwhile to make number go up (still), and hidden under the guise of “lowering prices”.
Let me put on my MBA hat and propose to only show the user websites selling new notebooks and suppress repair shop or repair guide pages.
This definitely happens with ridesharing services. Whenever you look up a location it usually quotes you, but if you come back to the app like in 5 minutes, it raises the price in a funny way.
Funny, maybe its when I travel, but, I’ll look up a route on Uber an hour before I plan to leave, go do something else for a while and it’ll have gone down a buck or two.
I don’t know how accurate this is. Every time i try googling this, i get multiple help forums (brand website, Microsoft help, reddit discussions) for how to troubleshoot, with no ads for new laptops. While i typically provide a more specific search (e.g. my laptop brand and model won’t boot), i tried googling “my laptop won’t turn on” and received similar, albeit less specific, suggestions.
I wonder if the original poster often searches for laptop prices to find deals and maybe it defaulted to that?
This post is posed as the next big step in internet pricing, not something necessarily happening today.
Today, it’s not standard procedure outside of some specific segments (that I know of, maybe airfare? But the data fed in is more limited) but tapping into the vast amounts of data we leak through the services we use is far too big of a gold mine for companies to overlook researching and tapping into. There’s a lot of things that need to happen (who supplies data? Google is the hypothetical here but what’s their price? etc.) but it’s absolutely feasible at scale.
It does happen today though. The price for things on Amazon is unique to you and constantly changes.
Good point, i totally misunderstood the “picture this” lead in. Yeah it’s a completely feasible situation though it does seem extreme.
Hotel and air ticket booking are like this already
OP is fearmongering. It’s all good.
internet has ads?
