Our Curious Amalgam
#303 You’re Charging Me How Much? A Discussion of Personalized and Surveillance Pricing
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.
25:55
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Quick takeaways
- Personalized pricing can benefit consumers through targeted discounts, especially for those who share their data willingly, yet it may also lead to higher prices for less price-sensitive demographics.
- Policymakers need to approach personalized pricing regulations with a nuanced understanding of its varied impacts on consumer welfare and privacy concerns.
Deep dives
Understanding Personalized and Surveillance Pricing
Personalized pricing, also known as surveillance pricing, involves charging customers based on individual characteristics using available data and algorithms. This practice is a form of third-degree price discrimination that tailors prices according to specific traits or behaviors of consumers. While traditional forms of personalized pricing have existed for years, the digital age has enabled more refined data collection and processing, leading to a rise in customized pricing strategies. The distinction between personalized and surveillance pricing lies primarily in the intent and consent surrounding data collection, with surveillance pricing often carrying a negative connotation due to potential privacy violations.
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