Our Curious Amalgam #303 You’re Charging Me How Much? A Discussion of Personalized and Surveillance Pricing
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Dec 9, 2024 Sanjog Misra, the Charles H. Kellstadt Professor of Marketing and Applied AI at the University of Chicago, joins the discussion on personalized pricing. He dives into how businesses utilize consumer data to set tailored prices, weighing the benefits and ethical dilemmas this creates. Misra also addresses the ongoing FTC investigation into surveillance pricing, highlighting the delicate balance between privacy and economic welfare. The conversation reveals why regulators must grapple with these evolving practices to protect consumers in a data-driven world.
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Personalized vs. Surveillance Pricing
- Personalized pricing tailors prices based on individual characteristics, using algorithms and data.
- Surveillance pricing has a negative connotation, implying data collection without consent for pricing.
Consumer Impact of Personalized Pricing
- The impact of personalized pricing on consumers depends on various factors, including data collection methods and individual responses.
- Evaluating its overall effect requires considering how many consumers benefit versus how many lose, and how to aggregate welfare measures.
Impact on Different Consumer Groups
- Personalized pricing often benefits less affluent consumers who actively seek deals and discounts.
- More affluent consumers may not receive the implicit discounts they would have enjoyed under uniform pricing.