This is why time matters. Society has generational amnesia. New generations will think of this as normal, and will even call you weird for thinking it could ever work differently. There will be an equilibrium, but it will be much farther than you consider reasonable.
You can see this dilemma on YouTube. Videos with highly exaggerated facial expressions, arrows, and sensationalized titles full of exclamation marks tend to attract far more clicks (and therefore more revenue) than those with honest titles and straightforward thumbnails. This trend has forced even high-quality content creators to adopt these tactics to remain financially viable. Despite the misleading titles and thumbnails, their actual content often maintains the same high standards once the video begins.
If you are watching from the browser I can recommend Clickbait Remover for Youtube. It replaces the title image with a frame from the video itself. It also changes the case of titles for them not to scream at you.
it is not about explicitly voting down a Youtube channel to punish the creator for making exaggerated claims,
that type of action does not scale
what will happen instead is that people will develop an immunity to these types of thumbnails and you will visit less - behaviors are the main driving mechanisms
it will be boring like exaggerated burlesque facial expressions in the early movies
Why would they stop working when everyone does it?
The methods described might be new, but the underlying principle is simple and fundamental - charge customers based on their willingness-to-pay. If customers are willing to pay $10 for your product, as opposed to $20, almost all businesses would take that into account when setting their prices.
In a low-tech world, you can only price stuff using one-size-fits-all. So you would price stuff based on something like median-willingness-to-pay. This puts your product out-of-reach for half its potential customers, while giving a big discount to the other half. The techniques described in the article are designed to "fix" the above - sell the product to as many people as possible, and give everyone a more even discount compared to their willingness-to-pay.
There is no reason for this strategy to stop working just because other companies are also doing it. In fact, it will only snowball once this practice becomes more commonly accepted.
In a macro sense, fine-grain-price-differentiation is undoubtedly in the best interests of all corporations. Whether they are in the best interests of consumers is more debatable. I'm guessing the answer is no. In theory, the best possible outcome is perfect price differentiation, coupled with increased corporate tax rates (or capital gains tax rates) that are used to lower income tax rates. I doubt this will happen anytime soon.
> Once you know the prices are jacked up just for "you", and once you know you are being "played," you behave differently and resist.
This isn't true. If you find out that only Tesla is customizing their car-price for you personally, you may decide to boycott Tesla. But what are you going to do if every single car company does the same thing? Boycott all cars and take the bus? Hence my point that price-personalization works even better when more companies do it, not less.
Yes, but that just changes your price sensitivity (potentially all the way to 0 if you refuse). There might be some ringing or chaotic dynamics in the price discovery dynamic system but a sufficiently advanced algorithm could take that into account. Still dystopian depending on your perspective.
> Why would they stop working when everyone does it?
If everyone does it, it's a de facto cartel.
Cartels generally end when one of the members breaks ranks and starts selling the product for less than the agreed-upon cartel price and vacuuming up all the customers. The result is often a price war.
Feels like there's also a practice for a couple of years where companies raise prices in line with inflation, but keep annual employee COLA raises pinned to their typical 2-3% historical rate.
It's pretty common from my experience, for Fortune 500 type companies to do an annual raise of 2-3% for employees that is not tied to a promotion. They may not call it a "COLA" raise, but that's what it is. Though, yes, I'm sure some have frozen that in recent years.
Note that they talk about it being a "merit raise", but that's sort of double talk. It's the budget for raises that aren't tied to a promotion. So the pool amount is 3.5%-ish, and you get some leeway to personalize it a bit..some people get 0%, some 2%, some 5%, etc. But it's just a COLA in disguise where most people get just under the pool percentage. Meaning most people get 2.5-3% or so.
Mercer gets their data from roughly 500 companies of varying sizes.
And, yes, I'm sure there are some places that don't give any sort of annual COLA type raises at all.
When a company says "cost of living" they mean their own, not their employees. So-called COLA adjustments are for Cost of Hiring, or Cost of Employee Retention.
The distinction is that it is calculated based on minimizing unwanted attrition due to wage competition elsewhere, and has nothing to do with how much rent or milk prices may have increased.
Everywhere I worked in my life (perm employment) I was getting at least the inflation. If performance (personal + corp) was well, I was getting an extra 3%-5% and bonus. (in the EU)
On Tinder you get invited to pay $500/mo for some "super secret exclusive" version. I got prompted by the app with a free month - it is wall to wall high end escorts.
At some point you gotta accept that this is dystopia.
With something like airlines that isn’t always obvious. Is a sustainable airline industry the greatest value? Or is it better to have a boom-bust market where passengers have greater access to travel?
These look like arguments for making price discrimination illegal?
I think alternative to making it illegal could be demanding full disclosure to eliminate information disparity. If a company does it, it should make it clear that it does it, and disclose the price range and criteria to determine your price (the latter can be obfuscated by AI-washing though). It looks like in the EU the requirement to disclose the fact of using personalised pricing alone (without further detail) discourages most of retailers from using it.
It's been pretty common in the travel industry for quite a long time. There's pushback every now and then, but generally the "free market" isn't doing much in that regard.
The price floor is set by the marginal cost even with price discrimination. That's the same price floor as in a single price system. The poor gain little, if any, from price discrimination.
Without price discrimination airlines would raise prices and not fill their planes. Price discrimination allows them to extract as much as they can which maximizes the number of people who can fly
Price discrimination doesn't guarantee cheaper products for poor people.
E.g. the same shampoo when labeled for women here costs more.
Or say Netflix costs less in some regions that are considered poor, but the rich people there still pay the lesser price.
If a business is only viable by extracting the most from every individual instead of finding a fair price, is it really better for society that business exists?
What a about the principle of fairness and people being treated equally?
> E.g. the same shampoo when labeled for women here costs more.
Hmmm... is it really the "same" shampoo? In my experience, products aimed at women typically have fancier packaging, added scent, and often exotic ingredients (which may or may not have any actual effect).
All of those things cost more money.
It's like the argument about laundering and pressing women's blouses costing more than men's dress shirts.
Men's shirts are more or less standardized, and can be processed using semi-automated equipment, while women's blouses often have lace, ruffles, or other decoration, large fancy buttons, unusual cuts, etc. and have to be pressed by hand.
> What an about the principle of fairness and people being treated equally?
Life is not fair from the moment of conception choosing which parents and location you are born to.
> If a business is only viable by extracting the most from every individual instead of finding a fair price, is it really better for society that business exists?
A buyer buying for the lowest price they can and the seller selling for the highest price they can is the definition of a fair price. Since supply and demand curves are constantly in flux, the fair price is also constantly in flux. Hence the practice of haggling with every vendor in old school markets/bazaars, even for daily vegetables.
The principle that it’s better for
company management to exploit finance market inefficiencies to yield profit today at the expense of the investors and bond holders caught holding the bag tomorrow.
No, I don't think so. It probably hurts the overall economy to squeeze every last bit of juice out of the consumer base like this, leaving them with no money to spend in other ways.
The maximum the business can charge is not just constrained by what the customer can afford, but also by the costs of alternatives that the customer could use (including the option of not doing it at all).
It's often the case that overall prices fall. For example, by keeping prices similar to what airline tickets used to cost for business customers, airlines can reduce the price to others and increase the number of flights, increase efficiency, and provide a better level of service.
Companies have always tried to maximize their revenue. It might be faster now but the process is no different than your local supermarket messing with the price of toilet paper every few weeks.
The innovation in that cheap capital has rolled up industries. It’s easy to keep meat prices high when 3 companies control 80% of volume. In past times, you have dozens or hundreds of suppliers who controlled little regional niche markets.
If I were to develop a retail product, when it came time to put a price on the package, you can be sure that I would collect data to see how much people were willing to pay for the product. That’s hardly “stop-the-presses!” headline news.
All these techniques, from gamification to behavioral mining, were developed in isolation - when only one actor maximized their profits.
Their results apply when most other actors don't pursue the same goals.
Once everyone starts to do it, I predict none will work and will be counterproductive on a larger scale.
A bit of a tragedy of commons.